Debt Settlement

An agreement in which the creditor agrees to accept partial payment from the debtor as payment in full.

In Canada there are two forms of debt settlement programs: informal debt settlement and formal debt settlement, known as a consumer proposal. A consumer proposal is a legally binding arrangement made through the Bankruptcy & Insolvency Act with the assistance of a consumer proposal administrator.

Informal debt settlements are arrangements made with the assistance of a debt settlement company or debt counsellor in return for a fee.