Debt Forgiveness Program : How to Get Debt Forgiveness in USA and Canada

Debt forgiveness is a reduction in the amount of money you owe, either in full or in part. It is possible to get some or all of your debts cancelled in exchange for a new payment plan.

With a large debt load, you’ve probably realised that budgeting is not an option for getting out of debt. A debt consolidation loan may have been denied to you or it may have been determined that you do not qualify for one. However, neither option reduces the amount of money you must pay back.

These programmes are the only ones in Canada that provide some form of payment relief.

Developing a Financial Plan

A DMP, or debt management plan, is not a debt forgiveness programme in the strictest sense of the word. It’s a method of debt repayment. Despite the fact that it reduces your interest payments, you are still required to make a full repayment of the principal.

To figure out your monthly payments under a DMP, simply multiply the total amount of your current debt by the number of years you have to pay it back. Depending on your financial situation, your credit counsellor may recommend a three-year plan. For those who can’t afford it, they may suggest spreading out your payments over up to five years.

Canada’s not-for-profit credit counselling agencies offer debt management plans to deal with simple consumer debts like credit cards, bank loans, and bill payments. Students, tax filers, and borrowers with payday loans cannot use a DMP to reduce their debt.

Creditor participation is also optional. It’s possible for a single creditor to refuse to write off some of your debt. Because of this, payday loan companies are usually reluctant to participate in the programme..

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