Credit counselling and debt settlement services
What fees are there on single payment plans?
If you decide to use a single payment plan that offers a one-time reduced payment to each of your creditors, the credit counsellor or debt settlement company cannot charge you more than 10% of the original amount of each debt they settle this way.
They are not entitled to their fee until the payment has been made to the creditor. The debt settlement agreement must tell you how much the credit counsellor or debt settlement company is charging for each payment.
Example of single payment plan fees
- $1,000 to Sears
- $400 to Bell
- $1,800 to the bank on a car loan
This is Kita's single payment plan:
- Sears agrees to take $800 as full payment
- Bell agrees to take $300 as full payment
- the bank agrees to take $1,250
The most the debt settlement company or credit counsellor can charge is:
|On settlement of the debt to Sears: 10% x $1000||$100|
|On settlement of the debt to Bell: 10% x $400||$40|
|On settlement of the debt to the bank: 10% x $1800||$180|