How to pay off a Consumer Proposal Faster

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A consumer proposal is an instrument available in Canada that legally binds you and your unsecured creditors, allowing for repayment of debts with reduced interest rates. A consumer proposal can reduce the total of your debt by up to 80%. You will cover that reduced debt through carefully planned repayments over time- when all payments are completed, along with some credit counselling sessions, then the consumer proposal will be complete!

One of the biggest concerns you might have is how long a consumer proposal will take. It can take several weeks to submit, contact and make any amendments- it’s not an easy process! But if your application gets accepted, then there’s hope that in 5 years (or less), you will be able to help get those worries off your shoulders.

What are some ways consumers can speed up this whole creditors agreement thing? 

How can you liquidate your Consumer Proposal faster?

You have up to five years in Ontario for the repayment process of your consumer proposal, but there is no rule saying that you cannot complete it sooner. 

Increase the number of payments

If you want to shorten the time it takes to finish your Proposal, increase the frequency of payments. Your licensed trustee can help with this option!

Increase the amount of the payments

You can speed up the repayment process by increasing your payments. Even a small amount such as $20 or more could make a massive difference to how quickly you pay off debt and keep on top of things financially!

Make a sizeable one-time Payment:

If you’re looking to pay off debt quickly, consider using a lump sum payment. You can speed up the process by giving your trustee any money from bonuses or unexpected inheritances. This will enable your trustee to whittle down your total balance and shorten repayment timeframes. This should only be made when such lump sum payment will not affect necessities of life such as food and shelter first!

By selling off assets:

You can do whatever you want with your assets, even when a consumer proposal is in effect. But if you are selling assets pledged against secured debts, you will need to pay those off first before using any surplus to reduce the balance of your Consumer Proposal. If your asset does not have any secured loan against it, you can use the total amount to amortize your balance. Bear in mind that a Consumer Proposal, which has lower interest rates, should not be the sole motivator of asset liquidation. 

Dana MacRae is a Licensed Insolvency Trustee with over 20 years of experience helping people like to get out of debt. Schedule your free consultation with Dana today, and let him help you to get your finances back in order.