Home » Debt Relief Services in Canada » Debt settlement: What to know before you sign

Debt settlement in Canada: What to know before you sign

Thinking about debt settlement? We’re here to explain how it works, the risks, and your legal alternatives, including a consumer proposal.

The Licensed Insolvency Trustees at Harris & Partners do not offer informal debt settlement or debt consolidation services.

Get a Free Debt Repayment Plan

Safe, secure & confidential

What is debt settlement?

During the debt settlement process, you hire a company to negotiate a debt with creditors on your behalf.

You pay a fee and the debt settlement company will work to lower your overall debt and propose a lump-sum payment.

The key aim of a debt settlement plan is to eliminate debt in a manageable way that helps a person or company avoid more drastic measures.

If your creditors agree, you may pay back less than you owe, but there’s no guarantee they will, and the company’s fees are added on top.

It could also damage your credit and there’s no guarantee that it will be approved.

If it’s not approved, you could be left off worse than when you started. It also doesn’t require all creditors to participate, so the burden may end up shifting.

How does debt settlement work?

If you’re struggling to pay existing or growing debts, you can hire the services of a debt settlement company to help you manage those debts and create a plan to settle them over a period of time.

Debt settlement companies will negotiate with creditors on your behalf to reach a final settlement that’s agreeable to all parties.

Creditors aren’t obliged to negotiate or settle for a lower debt repayment, but often will because they will get more in return than if the person or company goes bankrupt.

A debt settlement company can handle communication with your creditors and negotiate on your behalf. However, it can’t legally stop creditors from calling you, suing you or garnishing your wages.

If you want to know more about your debt relief options, you can call us today for a free consultation at 1-800-268-8093.

Speak with a Trustee today

       
   Harris & Partners Inc.
   2306 Google reviews 
  Write a review 
 
 
 
   
 
 
      Posted on Google  
   
   Rose Gore 
 9 November 2026
 
 
 Trustindex verifies that the original source of the review is Google. You are a great company helping me get out of debt, where no one else would help me because im on a disability but yous did. Thank you and keep up the good work . But also I would like to thank you the goals I want to achieve. Do to your help. Rose  Gore Wilson.
  
 
     Posted on Google  
   
   Navpreet Singh 
 9 November 2026
 
 
 Trustindex verifies that the original source of the review is Google. "I’m really grateful for their service. They helped me reduce a big burden, especially my debt and payment stress. They didn’t just offer quick fixes — they also took the time to explain budgeting and savings in a simple, clear way, so I can manage my finances better going forward. Highly recommend."
  
 
     Posted on Google  
   
   Trevor Stiner 
 9 November 2026
 
 
 Trustindex verifies that the original source of the review is Google. Amazing people to deal with
  
 
     Posted on Google  
   
   Donna Brookes 
 9 November 2026
 
 
 Trustindex verifies that the original source of the review is Google. I was embarrassed to after 70 years to have to apply for debt relief.  Valad along with the team made me feel comfortable And explained everything so I could understand  I did sign up for Neo And my experience there has not been very welcoming, but I'm going to stick with them and see if it improves  I'm finding that my CPP and old age as well as my takes anywhere up to nine days for me to even receive my money in the bank. So this is a little concerning. But I'm dealing with it. I love that. I'm making even sense when I'm shopping at different stores.  I'm looking forward to today. I don't have any more debt and I can see that in my future.  I can't thank Harris Partners enough for Making it possible To eventually be debt free. I looked over to our Video chat in the future  I would definitely tell my friends if they need debt to contact your firm.  Thank you once again for all your help
  
 
     Posted on Google  
   
   Rianna McIntyre 
 8 November 2026
 
 
 Trustindex verifies that the original source of the review is Google. Very quick service, very easy to understand and contact. Couldn't be happier with their help and would definitely recommend to others
  
 
     Posted on Google  
   
   Donna Bennett 
 7 November 2026
 
 
 Trustindex verifies that the original source of the review is Google. This is on behalf of Colin Bennett

I have a wonderful experience dealing with Harris and Partners. They are very professional and non judgemental
  
 
     Posted on Google  
   
   Dj Picco (Huseni) 
 7 November 2026
 
 
 Trustindex verifies that the original source of the review is Google. I been working with Harris & Partner for almost 7 months, and there incredible people to work with
very nice service.
  
 
     Posted on Google  
   
   Dave Townsend 
 7 November 2026
 
 
 Trustindex verifies that the original source of the review is Google. Thus far it has been a seamless process.
  
 
     Posted on Google  
   
   Jourdan Marasigan 
 6 November 2026
 
 
 Trustindex verifies that the original source of the review is Google. Very helpful and know what they are doing
  
 
     Posted on Google  
   
   Avery 
 6 November 2026
 
 
 Trustindex verifies that the original source of the review is Google. Great service
  
 
 
  
 
   Verified by Trustindex  Trustindex verified badge is the Universal Symbol of Trust. Only the greatest companies can get the verified badge who has a review score above 4.5, based on customer reviews over the past 12 months. Read more

Get debt help from a Licensed Insolvency Trustee

Consultation

Let’s sit down for a chat about your money situation. We promise a safe, private, and non-judgmental space. To give you the best help, we need to know about your income, debts, and who you owe money to. And remember, this chat is completely free and confidential.

Options

Once we know what you’re dealing with, we’ll create a personalized plan for you. We’ll explore all the ways to manage your debt, focusing on what feels right for you. We’re here to find the best solution for you, without any pressure.

Solution

Once you’re happy with the plan, we’ll put it into action. Our main goal is to keep you financially healthy. We’re here to support and guide you every step of the way. We’re committed to making this process as smooth as possible for you, because your peace of mind matters to us.

Speak with a Trustee today

Get debt help from a Licensed Insolvency Trustee

Consultation

Options

Solution

Speak with a Trustee today

Free debt repayment calculator

Get a free debt repayment plan tailored to your needs

Expert support from Licensed Insolvency Trustees

Your Information is safe & confidential

Step 1: Your debt

Your plan

Your Information is safe & confidential

The risks of for-profit debt settlement companies

One of the biggest risks of this debt solution are for-profit debt settlement companies. They will often promise quick fixes to debt problems, and typically ask you to pay them directly, instead of paying your creditors.

The idea is that they will negotiate with your creditors on your behalf, supposedly settling your debts for less than you owe.

However, stopping payments to your creditors can significantly damage your credit score, land you with late fees, and increase your total debt due to accumulating interest. There is also no guarantee that your creditors will even agree to negotiate with these companies.

Many for-profit debt settlement companies also often charge high upfront fees. These fees tend to be non-refundable, even if the company fails to settle your debts. This is why it’s important to be cautious – there could be a conflict of interest, where their main goal may be to make profits rather than genuinely help you.

We understand that this can make your decision even harder to make, but you don’t have to go through this alone. Our main goal will always be to help you find a way out of your financial struggles.

Get in touch today for a free and confidential consultation – we will help you find the best debt solution for you.

What to look out for when considering debt settlement companies

Before you sign up for a debt settlement service, make sure you thoroughly research the company. If you’re struggling with debt, the last thing you want is to be dealing with a company that doesn’t have your best interests in mind. Here’s what to look out for:

High pressure sales tactics– These companies often use telemarketing to get you on board so, if you receive a call, don’t feel pressured into making a decision on the spot.
High fees – Be wary of expensive upfront payments and monthly fees, these are often non-refundable, even if the company doesn’t settle your debts.
Delayed payments – If you notice your debt settlement company is paying your creditors late, they are likely doing this on purpose as a negotiation tactic and it can significantly damage your credit rating.

Another major thing to look out for is unrealistic promises that sound great but can rarely be fulfilled. Remember that debt settlement companies can’t:

Promise to significantly lower your debt
Guarantee your creditors are willing to negotiate
Stop creditors / debt collectors from contacting you and / or taking your money or salary
Manage government-regulated processes that free you from debt

Debt settlement vs a consumer proposal

Debt settlement companies can’t legally bind your creditors or stop collection action. A consumer proposal, filed by a Licensed Insolvency Trustee, can do both.

The risks of private debt settlement

Not regulated under the Bankruptcy and Insolvency Act
No legal protection; creditors can keep calling, sue you or garnish your wages
Creditors don’t have to agree, and some may refuse
Fees are often charged upfront, even if no debts are settled
Stopping payments while you save can damage your credit and add interest and late fees

What a consumer proposal does instead

Stops most collection action, including wage garnishment, as soon as it’s filed
Interest stops on the debts included
Once accepted, it’s legally binding on all your unsecured creditors
Fees are set by law and included in your monthly payment
Only a Licensed Insolvency Trustee can file one

Discuss your options

Alternatives to debt settlement in Canada

Not sure debt settlement is the right choice for you? That’s okay. There are other options available and our team is here to help you make the right decision for you.

Option 1. Consumer Proposal

A consumer proposal is a practical way to reduce your debt and manage it better. It’s a legal agreement under the Bankruptcy and Insolvency Act where you arrange to pay a portion of what you owe to your creditors, over an extended period.

This setup allows you to spread your payments over several years, making each monthly payment affordable based on your financial situation, and has no interest!

Our Licensed Insolvency Trustees will make it even easier for you by handling the payments for you. Just send your payment to them, and they’ll take care of paying your creditors.

File a consumer proposal

Option 2. Bankruptcy

The thought of bankruptcy can be overwhelming, but our team is here to guide you through it. Declaring bankruptcy means giving your assets to a Licensed Insolvency Trustee, who will use them to settle your debts.

While it’s a step to take only when necessary, it can effectively wipe out your debts, giving you a clean slate. If you’re considering this option, our professionals are here to help. We’ll sit down with you, understand your financial situation thoroughly, and work together to find the best solution for managing your debt.

File for bankruptcy

Our Licensed Insolvency Trustees – here to help you compare your options

Struggling with debt can feel really heavy. But don’t worry – our team of friendly Licensed Insolvency Trustees is here to help you find your way out of it.

Jay T. Harris

FCPA, CIRP, LIT

Licensed Insolvency Trustee
Kyle Harris

LL.B., CIRP, LIT

Licensed Insolvency Trustee
Adam Fisher

CPA, CIRP, LIT

Licensed Insolvency Trustee
Joshua Harris

BCOMM., MIB, CIRP, LIT

Licensed Insolvency Trustee
David Adams

Licensed Insolvency Trustee
Doug Loiselle

Licensed Insolvency Trustee
Robert McLernon

BComm, CIRP, LIT

Licensed Insolvency Trustee
Shelley Koehli

Licensed Insolvency Trustee
Jill Strueby

Licensed Insolvency Trustee

Debt settlement FAQs

Can I buy a house during debt settlement?

Yes you can. But it’s important to be aware that, in order to buy a house or apply for a mortgage, you usually need a strong credit rating to have a successful application and get favourable rates. Debt settlement programs can have an initial impact on your credit score, but in most cases less of an impact than other debt relief solutions, such as bankruptcy.

What is the difference between debt settlement and bankruptcy?

Both debt settlement and bankruptcy are designed for those who are struggling to repay the full amount of debt they owe.

Debt settlement programs are arranged on behalf of debtors by a debt settlement company. They are negotiated and actioned on their behalf with creditors in order to reach an agreement on a payment plan to pay all, or a percentage, of the debt they owe.

Bankruptcy, on the other hand, is a legal process that involves debtors surrendering assets to pay-off the debt.

How does debt settlement affect your credit score?

Debt settlement, like many debt relief programs, will in the vast majority of cases negatively affect your credit score.

A debt settlement program can affect your credit rating for 6+ years. However, each individual circumstance is different and the amount of debt, value of assets, length of repayment program and maintenance of payments can all have an affect on how much your credit score is impacted.

Get debt advice with Harris and Partners

Speaking with a Licensed Insolvency Trustee can help you make the appropriate decision that is best for you and your personal finances.

Contact information

It's never too late to obtain debt help. Book your free consultation today

Phone number: 800-268-8093
Email: hello@harrispartners.ca

Send us a message

Contact form

Support across Canada

Why choose us for consumer proposals in Ontario?

Remove up to 80% of your debt

Our Licensed Insolvency Trustees can provide a customised consumer proposal that could shrink your debt by up to 80%.

Get debt help

Professional guidance in any language

Our multilingual team offers debt support in Farsi, Portuguese, Italian, Tamil, and more, so you can feel comfortable every step of the way.

Meet the team

Nationwide support

With offices in nine provinces, we offer in-person debt support across Canada—from Atlantic provinces to Ontario to British Columbia.

See our locations

Browse debt options in Canada

Consumer Proposals

Consumer proposals can be an alternative to bankruptcy that reduces debt and gives you more time to pay back creditors.

Legally stop most collection action
Usually keep your assets
Avoid bankruptcy

Bankruptcy

A last resort when other options won’t work. Some debts, such as support payments and court fines, aren’t released.

Wipe out most unsecured debt
Keep assets protected by provincial law
Support from your trustee throughout

Debt Consolidation

A loan from a bank or lender that combines several debts into one payment.

One payment instead of several
May lower your interest rate
Doesn’t reduce what you owe

Not available through Harris & Partners.

Debt Management Plan

A non-profit credit counsellor arranges one monthly payment to your creditors, usually over up to 5 years.

You repay the full amount owed
Interest may be reduced
Creditors don’t have to agree

Not available through Harris & Partners.

Credit Counselling

Non-profit credit counsellors help you understand your finances and build a budget.

Work out what you owe
Plan a budget
Learn money management skills

Not available through Harris & Partners.

Debt Settlement

Private companies negotiate a lump-sum payment with your creditors, who don’t have to agree. They aren’t Licensed Insolvency Trustees

Not regulated under the BIA
No legal protection from creditors
Fees often charged upfront

Not available through Harris & Partners.

Corporate Bankruptcy

An orderly way to close a company that can’t be rescued. Directors may still be personally liable for some debts.

Orderly wind-down of the company
Assets sold by the trustee
Ends creditor claims against the company

Division I Proposals

For businesses, and for individuals whose debts (excluding their mortgage) are over $250,000. Change the terms of your debt by reducing what you owe, extending the repayment period, or both.