Add every creditor below with its balance, rate and minimum payment, same as you would for a payoff plan. This compares three paths: paying it down yourself smallest-first (snowball) or highest-rate-first (avalanche) at your real rates, against a settlement plan where interest and charges stop and every creditor takes an equal % write-off, funded by one pooled payment. Generic math based on what you type in — not financial advice.
| Creditor | Balance | Rate (% APR) | Min payment / month | |
|---|---|---|---|---|
| Total | $0.00 | 0.0% | $0.00 |
This assumes interest and charges have stopped, and every creditor takes the exact same percentage write-off (haircut) on their balance — nobody is favored. Choose which number below the calculator should work out for you — it stays greyed out and locked; the other two are yours to set.
0% = every dollar repaid in full, just interest-free
| Creditor | Starting balance | Rate | Cleared |
|---|
A haircut is the percentage of a debt a creditor agrees to write off — accept as never being repaid. A 30% haircut means a creditor with a $1,000 balance agrees to receive $700 in total and treat the debt as settled, instead of chasing the full $1,000.
Equally, in percentage terms. Every creditor takes the same percentage haircut on their own balance, and every creditor's share of your periodic payment is proportional to how much of the total debt they're owed. A creditor owed 40% of your total debt receives 40% of every payment and 40% of the total written off — nobody is treated better or worse than anyone else.
So you can see what you're comparing a settlement against. Snowball and avalanche use your real balances, rates, and minimum payments to project what paying everything off yourself would cost and how long it would take, with no arrangement needed. The settlement plan card sits alongside them so you can weigh it against actually continuing to pay as you are now.
Only if your creditors actually agree to freeze it. The settlement plan assumes interest and charges have stopped accruing, which is a common condition in real debt management plans and settlement arrangements, but it's a term to negotiate, not something that happens automatically. Confirm it in writing with each creditor.
No. The settlement plan is a plain calculator for an informal, negotiated arrangement — it has no legal effect on its own. Many countries have formal processes (insolvency, voluntary arrangements, debt repayment orders, and similar) with legal protections this calculator doesn't model. A free nonprofit debt advisor can tell you which options actually exist where you live.
Not necessarily, and they're under no obligation to. Different creditors and different debt types (credit cards, tax debt, secured loans) are often treated very differently in practice. This calculator shows you what an equal, pro-rata proposal would look like on paper next to your other options — it doesn't negotiate on your behalf or guarantee any creditor accepts it.
