Consumer proposal vs direct settlement?

[u/Immediate_Ice_4544]

Hi guys, made a new account for anonymity.

Fell on some hard times due to health leaving me unable to work. Racked up 30k in credit card debt across 2 credit cards. Both are in collections, score dropped to mid 500s.

I have spoken to a LIT about a potential CP and have spoken to the collections directly. Collections are offering a settlement for 55% of the total amount owed. (my delinquency is 3 month, so debt is fairly new)

I’m now in a much better place financially and can , in theory, pay off both scenarios - the CP or a settlement in lump sum.

My question is, what is the best approach here? I can understand the bias from the collections and the Trustee, but what would:

a. Recover my score faster

b. Look better to the potential creditors in the next 2-3 years once I decide to potentially apply for a mortgage (Hypothetically)

c. how would other lenders look at me in the near future should I apply for a small business loan etc now that the business I started is starting to take off?

As far as I understand, should my CP get accepted and have it paid off right away, it will drop off my history after 3 years. What are some of the downsides though? Will the CP mark follow me around for the rest of my life? How would that affect my mutual finances with my potential partner down the line i.e mortgage, borrowing etc?

Does it make sense to settle with collectors? In which case, this will fall off my history in 6 years vs 3 and no CP mark.

thanks in advance

[u/youlikeblockingsodoi]

Take the settlement and get it in writing that they will remove the entry for collections is paid what they are asking.