Debt Settlement: Overview
Here’s what you need to know about debt settlement in Canada.
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What Is Debt Settlement?
A debt settlement is an agreement made with your creditors to repay part of your total debt, either in a lump sum or through a structured repayment plan.
Often facilitated by debt settlement companies, this approach aims to lower your total repayment amount. But it’s important to know that informal programs have risks, and they don’t guarantee creditor approval or protection from legal action.
The only legally binding form of debt settlement in Canada is a consumer proposal, filed through a Licensed Insolvency Trustee. Unlike informal options, a consumer proposal is enforceable by law, protects you from creditors, and can reduce your debt by up to 80%.

Find Out How Much You Can Save – With a Consumer Proposal!
Learn how a consumer proposal compares to debt settlement when it comes to eliminating debt by using our helpful debt calculator.
Benefits of Debt Settlement
Debt settlement can be a powerful way to reduce what you owe — but it’s not the right solution for everyone.
Understanding the advantages and potential drawbacks is essential before making a decision. For example, debt settlement may reduce your total debt, but you’re still vulnerable to wage garnishments. If you’re unsure if debt settlement is right for you, learn more about its advantages to help you make an informed choice.

Overview
What Debts Apply to Debt Settlement?
Debt settlement can address a range of unsecured debts that are often hardest to manage. If you’re overwhelmed by growing interest rates or falling behind on bills, debt settlement might help.
- Credit card debt
- Payday loans
- Store and retail card debt
- Overdue utility and phone bills
- Medical expenses
- Unsecured personal loans
- Non-government student loans
Discover more about your options when it comes to debt settlement and what’s covered (and what isn’t).

eligibility criteria
Who Can File for Debt Settlement?
Not everyone qualifies for a debt settlement program — here’s what you’ll need:
- A reliable income that can support regular payments
- The ability to save toward your repayment
- A commitment to completing the plan within 36 months
If you meet these requirements, you may qualify for a debt settlement program.
next step
How Do I Get Started?
The first step toward debt relief is speaking with a Licensed Insolvency Trustee — the only professionals legally authorized to file all forms of debt relief in Canada.
At Spergel, our experienced trustees offer personalized, non-judgmental support. We’ll meet with you (as often as you need), review your financial situation, and clearly explain every option available — including whether a debt settlement or another solution is best. There’s no pressure, just expert guidance. We’re proud to offer:
- Free, confidential consultations
- Clear, customized debt relief plans
- A 99% acceptance rate on the consumer proposals we file
- Help from the same trustee — start to finish
Everyone’s Situation is Different. Let’s Talk About You.
Book a free consultation today — we’ll help you make a plan that works for you.

Real Canadians. Real Success — Like Jordan
“After years of struggling with escalating tax debt and the overwhelming stress it brought into my life, finding Spergel was a turning point for me. Their team approached my situation with an incredible mix of professionalism, empathy, and expertise, taking the time to understand the nuances of my financial dilemma. They negotiated directly with the CRA, securing a payment plan that was both manageable and fair, and even managed to reduce my overall debt. What truly stood out was how they empowered me with the knowledge and tools to take control of my finances moving forward. Thanks to Spergel, I can focus on my career and being a father without the constant worry of tax debt looming over me.”
– Jordan, Ontario


Jordan's Story is just one of many
It shows that once you face your debt and get the right help, life can get better – quickly. Discover more Success Stories of Canadians we’ve helped, or reach out to us.
How We’ve Helped Others
Every debt story is different — and so is every solution. Here’s what real clients had to say about working with Spergel.
Let’s Find the Right Solution for You
Every financial story is different. Let’s talk about yours and explore the solution that fits you best.
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