Ask The Mortgage Doctor If It’s Right For You
If you are:
* Having trouble paying all your bills, even though you have a good job?
* Thinking about filing bankruptcy, but not really wanting to?
* Simply looking for more information about ways to deal with your debt?
What do you do?
If you find yourself in this situation month after month, a Consumer Proposal may just be what you’re looking for.
A Consumer Proposal is suitable if:
- You have debts over $5,000, but not over $250,000 (not including your home mortgage).
- You’ve got a good job, and can afford to make some payments each month.
- You just cannot afford to repay everyone in full with interest.
- You can’t get a debt consolidation loan because your debts are too high, even with your steady job.
- You don’t want to go bankrupt, because:
- With your income, you would be subject to surplus income penalties.
You don’t want to lose any of your assets, such as a valuable home or car.
Advantages of a Consumer proposal
For you the consumer:
- You can negotiate to repay only a portion of the debt you owe.
- Interest stops accumulating at the date you file.
- All of your unsecured debts are included, except some limited categories (see below). Debts from credit cards, bank loans, payday loans, and income taxes are included.
- Maximum repayment period is five years.
- All collection activities by creditors (except for support and alimony) are immediately stopped, including wage garnishment.
- You don’t lose your house or any other assets.
- The effect on your credit rating is less severe than a bankruptcy.
- You meet a portion of your obligations to your creditors.
Why would your creditors accept a consumer proposal where they are getting less than the full amount they are owed? In most cases they don’t want you to go bankrupt. A Consumer Proposal is better for them because even though they may not get all of their money, they are getting more than they would get in a bankruptcy.
What a consumer proposal won’t do for you
A Consumer Proposal will not:
- Allow you to pick and choose the debts to be included.
- Eliminate your support and alimony obligations.
- Eliminate your student loan obligations.
- Deal with your secured debts, such as your house mortgage and car loan. Your trustee can advise how to deal with these.
Where to go from here?
For a free consultation on whether a Consumer Proposal is right for you, contact a Trustee.
This article is courtesy of Bankruptcy Canada
Bad things happen to good people! We want to be the ones to make something good happen when you need a mortgage, to buy a home or refinance. The Mortgage Doctor will treat you with respect and guide you to an approval. Contact us!