An individual facing debt problems will usually have several options when it comes to how to address their current debt situation. Today I am going to introduce you to one debt relief strategy that I will refer to as The Wait-and-See Debt Relief Strategy.
I have assisted hundreds of Canadians obtain favourable results employing this strategy. The Wait-and-See debt relief strategy, however, involves risks and it is not for everyone.
1. Types of debt where this strategy is available
The Wait-and-See debt relief strategy is only available in connection with certain types of debts.
i. Must be a consumer debt
The Wait-and See debt relief strategy is only available for consumer debts or debts arising from a consumer transaction. Accordingly, this debt relief strategy is not available for amounts owing to the government.
ii. The debt must be an unsecured debt
The Wait-and-See debt relief strategy is not available on secured debts including mortgage debt and car loans. If you fail to make payments on a secured debt then you should anticipate that your creditor will seize its collateral. If you do not make your car payments, for example, your lender may seize your car.
iii. Types of debt where Wait-and-See debt relief strategy commonly used
The Wait-and-See debt relief strategy is often used for the following types of debt:
credit cards
personal loans
lines of credit
utility bills including cell phone, internet, and cable
It is important that you maintain a roof over your head. Therefore, tenants should pay rent to their landlords and homeowners should make their mortgage payments.
2. How the Wait-and-See debt relief strategy works
When you use the Wait-and-See debt relief strategy for a particular account then you do not make any payments on that account.
It is also important that you do acknowledge owing any monies on this account to either your creditor or its authorized collection agent.
It is recommended that you set aside some, or all, of the monies that you save by not making payments to a creditor into a special fund that I refer to as your debt settlement war chest.
You can use the Wait-and-See debt relief strategy on one of your accounts or you can employ it on multiple accounts.
3. Avoid being victimized by the exercise of a financial institution's right of set-off
Before you start using the Wait-and-See debt relief strategy you should ensure that you will not become a victim of a financial institution's exercise of its right of set-off.
If you are going to stop making payments on a credit card, personal loan or line of credit obtained through a particular financial institution then it is critical that you close any bank accounts that you have at that financial institution.
If you stop making payments on your credit card, personal loan, or line of credit obtained through a specific bank and you have a bank account at that same bank then your bank will likely exercise its right of set-off and simply take monies from your bank account at that financial institution and apply it against your unpaid account at that financial institution.
Individuals who decide to use the Wait-and-See debt relief strategy will often open a new bank account with a new financial institution before they stop making payments to their creditors.
4. The Wait-and-See debt relief strategy takes advantage of five key facts
The Wait-and-See strategy takes advantage of the following five key facts;
Creditors do not sue every consumer who fails to pay an account
Once your account is six months' old, you might be able to negotiate a one-time lump sum payment for substantially less than what you owe as settlement in full
The longer your account remains unpaid, the greater the likelihood that you can negotiate a generous lump sum settlement
If your creditor does not sue you before the expiry of your province's limitation period then you will be able to avoid paying a penny to your creditor
If an account appears on your credit report then it must be removed from your credit report six years from the date of your last payment
5. Three disadvantages of the Wait-and-See debt relief strategy
There are three disadvantages to the Wait-and-See debt relief strategy.
It will have a negative impact on your credit score.
2. You should anticipate receiving collection calls.
You may want to read an article I wrote on this website titled "How to Avoid Collection Calls".
3. There is a risk that your creditor might sue you.
You might want to read an article I published on this website titled "Will my creditor sue me?"
6. What Can You Do If Your Creditor Sues You?
If your creditor sues you then you can attempt to negotiate a one-time lump sum payment for less than the amount you currently owe.
Ideally, you have been building a debt settlement war chest using the monies you have saved by not making payments to your creditor. These monies can be used to help pay for your settlement.
You also have the option of meeting with a Licensed Insolvency Trustee (LIT) and exploring the merits of making a consumer proposal or filing for personal bankruptcy.
7. Contact me to learn more about the Wait-and-See Debt Relief Strategy
If you would like to learn more about the Wait-and-See Debt Relief Strategy then I would invite you to contact me and we can schedule a 30-minute telephone consultation. You can either call me at (519) 987-3270 or complete a Submission form at the bottom of the Home page on this website.
In this YouTube video titled "The Wait-and-See Debt Relief Strategy" I describe in some detail a debt relief strategy that takes advantage of the passage of time.
In this YouTube video former collection agency lawyer and author Mark Silverthorn shares his secrets gained over three decades in the debt collection and debt relief industries for dealing with debt.
Former collection agency lawyer and author Mark Silverthorn has helped hundreds of Canadians obtain favourable results employing the Wait-and-See debt relief strategy.
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