Start by naming the service—not the advertising claim
“Debt relief” is not one legal process. A settlement company may try to negotiate an informal lump-sum settlement. A credit counsellor may discuss a voluntary debt management plan. A Licensed Insolvency Trustee can assess formal options under federal insolvency law. Ask the company to identify, in plain language, which service it is offering and which creditors it expects to participate.
FCAC warns that creditors do not have to negotiate with a debt settlement company. A company also cannot guarantee that every creditor will accept a reduced amount. If the sales conversation moves between settlement, consolidation and a consumer proposal, stop and ask who would provide each service and under what agreement.
Map where every dollar goes before you enrol
Ask whether your payment goes to creditors immediately, accumulates in a separate account, or pays company fees first. Then ask what happens if no creditor accepts an offer. A lower proposed settlement amount can still be a poor outcome if fees, late charges and missed-payment interest continue while money builds up.
Use a simple written schedule: the amount paid each month, the portion taken as fees, the amount reserved for settlements, and the earliest date a creditor could receive money. Do not rely on a verbal statement such as “most clients settle quickly.” Your own contract and creditor responses are what matter.
| Question | What the answer should show |
|---|---|
| What do I pay before a settlement? | Every setup, monthly and service fee |
| Where is settlement money held? | Account owner, access and withdrawal terms |
| When are creditors paid? | Trigger and estimated timing for each offer |
| What if an offer is rejected? | Fees, refunds and your remaining balance |
Do not assume your accounts are paused
Stopping payments can lead to additional interest or fees, collection activity and credit-report consequences. A settlement company cannot stop a creditor from collecting merely because you enrolled. Ask each creditor directly whether any arrangement has been accepted, and keep the confirmation.
If a collector, court or secured lender has given you a deadline, deal with that deadline directly. Completing a website form or talking to a settlement salesperson does not extend it.
Compare the same facts across every option
For each option, record the total expected payments, fees, length, creditor participation, credit-report implications, assets or security involved, and what happens after a missed payment. Do not compare only the monthly payment. A longer plan may feel easier while costing more or keeping you in debt longer.
Provincial rules can apply to debt settlement services. Ask the company which regulator or licence applies where you live and verify the answer with the relevant government office. For formal insolvency options, use the federal directory and information from the Office of the Superintendent of Bankruptcy.
Prepare for a conversation
- Complete fee schedule and refund terms
- List of creditors the company expects to contact
- Written explanation of what happens while offers are pending
- A side-by-side total-cost comparison with other options
You do not need account numbers, a SIN, banking credentials or uploaded documents to start our enquiry.
Can a debt settlement company guarantee that my debt will be reduced?
No. A creditor can reject an informal settlement offer. Treat a guaranteed reduction, guaranteed creditor acceptance or guaranteed credit-score result as a warning sign.