A Toronto Consumer Proposal in Depth
Consumer Proposals and Your Credit
How do consumer proposals impact your credit in Toronto?
Generally, with the filing of bankruptcy or a consumer proposal, the rating agencies allocate a very low to lowest credit score. It is no different in Toronto. The credit rating is withdrawn after a certain period, depending on the data type and where you live. A Consumer Proposal does not remain on the credit report all the time. It can stay on your credit report for up to six years from the date you file it. One of the advantages of a Consumer Proposal is that if you pay it faster, then the duration of time it appears on your credit report is lessened.
Obtaining Credit in Toronto after a Consumer Proposal
Your ability to secure credit in Toronto relies upon your ability to convince a lender that you are a reasonable credit risk, despite the consumer proposal setback. There is no obligation on the part of a lender to extend credit to anyone.
After repaying the debt:
- Send copies of the final documents to the significant credit-reporting services.
- Be sure all the information has been documented accurately.
- Keep copies of everything for future transactions too.
If you have had problems following a consumer proposal, please feel free to consult with our office in Toronto. For more information, contact us through this site, or call our offices for an appointment at (647) 812-6405
Debt inclusions in a consumer proposal
Which debts are included in a consumer proposal?
Generally, consumer proposals deal with unsecured debt that does not demand the security of an asset like a house or vehicle. These contain:
- Credit cards
- Personal loans
- Payday loans
- Lines of credit
- Income tax
- Some student loans
If this total debt is less than $250,000, you are qualified to file a consumer proposal. If you are inquisitive, contact our Toronto Consumer Proposal Trustee – Dana MacRae, to discuss a Division 1 proposal if you do not entitle to a consumer proposal.
Secured debts are guaranteed repayment by an asset, like a house or automobile, and are not a part of consumer proposals. If you file a consumer proposal, you can either continue to pay the secured creditor to retain title to the asset or stop those payments and surrender the asset. That means the bank, credit union, or any other financing agency takes guardianship of your asset and resells it to recover the loan.
Secured loans consist of vehicles secured by the car, truck, motorcycle, or recreational vehicle and mortgages guaranteed by the real estate. Even though the secured creditors are not involved in the agreement, they get notifications when you file a consumer proposal. Your consumer proposal amount can be adjusted if you do not wish to submit your asset. Financial struggles need not be permanent. A consumer proposal is a chance for a fresh financial start in Toronto, enabling you to restructure your repayment schedule and get you out of debt.
Our counseling staff at Dana MacRae’s Toronto office can present you with options for repayment and help you decide the best course of action. Do not wait anymore. Contact us now to help resolve your financial issues.
Contact our office for more detailed information about this process and your situation.
Pros and Cons of Consumer Proposals
What are the pros and cons of a consumer proposal?
Consumer proposals are government-authorized settlement programs in Toronto for unsecured debts. A consumer proposal helps you to save assets from liquidation, is a bankruptcy alternative, and makes it more manageable to recover and rebuild credit. It is a form of negotiation with creditors.
Advantages of a consumer proposal
- Deduction of unsecured debt by as much as 75%
- Avoid bankruptcy
- Consolidate debts into a single monthly payment of a fixed amount
- Legally settle debts, including the Canada Revenue Agency (CRA)
- Minor damage to your credit rating
- Quicker and earlier financial recovery
Disadvantages of a consumer proposal
- The exclusion of secured debt
- It affects the credit rating through the debt write-offs
- You will be considered a high-risk borrower
- Exclusion of seven-year-old student loans
- It affects your overall financial structure.
Alternatives to a consumer proposal
If you do not have a regular, stable income; have large secured debts; or are not solvent, there are other options to consider:
- Debt consolidation
- Debt Counseling sessions
Our Toronto office can also provide advice and counsel about various options. We train our discrete, non-judgmental staff to consider all options and discuss options with you. We will be delighted to examine your complete financial status and history and help you make the best judgment possible under the current circumstances. We are happy to set an appointment for you at your convenience without obligation or charge, or you can book an appointment through our website.
Call us at (647) 812-6405 for a fresh, tension-free financial start.
Articles we prepared on Consumer Proposals in Toronto
A Change in your Financial Situation after Filing a Consumer Proposal
Financial circumstances take unexpected routes in everyone's lives. A consumer proposal helps you settle your financial problems by paying off your debts if they are at most $25,000. Yes, a consumer proposal is a formal contract under the Bankruptcy and Insolvency Act...
Are Consumer Proposals Good or Bad? Disadvantages of Consumer Proposals
A consumer proposal is the best debt relief option for Canadian residents. But, filing a consumer proposal in Canada has its consequences. But is a consumer proposal good or bad? Under what occasions does a consumer proposal work as a way out of debt? When do the...
Can a consumer proposal affect my partner?
If you and your spouse constantly struggle to manage your debt, consider discussing debt management options available to you with a Licensed Insolvency Trustee (LIT). In this article, we highlight the Consumer Proposal, one of the debt management options, and the...
Can you file twice for a consumer proposal in Waterloo?
You may have previously cleared debt by filing a consumer proposal in Waterloo and have again found yourself in another debt that requires you to file another consumer proposal to pay it off. When you find yourself needing another consumer proposal to pay off debt...
Home Equity Loans VS Consumer Proposals
Introduction You might be hoping for a way to consolidate your debt if you are struggling with credit card debt or paying multiple loans every month. A home equity loan might be the best option for you. Although there are various uses to home equity loans, homeowners...
Are you a home owner or a tenant ? Dealing with debts during COVID-19 pandemic
Introduction The COVID-19 pandemic has created turmoil in people's lives for a long time. The real estate industry is no exception. Owning or renting a home can be an expensive undertaking during this pandemic. Other than the initial down payment, when you own a...
Consumer Proposals vs Personal Bankruptcy: Which is better?
Introduction Most citizens file for personal bankruptcy or consumer proposals in Canada, making them the best insolvency options for a person facing financial troubles. Consumer Proposals and Personal Bankruptcies are under the Bankruptcy and Insolvency Act. Each of...
Are you worried about your Credit Card Debt? Stay debt-free with these eight simple rules
Many customers struggle with credit card debt. Although getting yourself out of credit card debt can be challenging, it is possible. It just takes focus, proper guidance, determination, and a plan that works with your financial situation. Here are some simple rules to...
Are you dealing with Debt problems? Solutions are here.
Debt Problems: Introduction Debt problems are not always sudden. Even so, it's a fact that financial difficulties can arise suddenly and unexpectedly, like the loss of a job or a vehicle breakdown. Debt problems can be of all sizes, from being a few hundred dollars...
Mortgage deferments are almost up: A financial wake-up call.
COVID-19 struck at the beginning of 2020, devastating millions of Canadians and reducing their income significantly. Renters struggled to pay their rent, while homeowners were worried about meeting their mortgage payments. The Canadian government made efforts to...
We can help you determine whether a consumer proposal is right for you
A Consumer Proposal is your Chance
for a Fresh Start.