Refinance Consumer Proposal

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.

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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!

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