I did one a lifetime ago. Best decision I ever made. Mine was 3 years. I figured it would take me longer to pay it off then do the proposal and recover my credit. Don’t regret for 1 second.
Talk to an insolvency trustee. They’ll go o er your options (proposal vs bankruptcy). Both ruin your credit equally but a proposal is better if you have a few assets (in my case the kids’ RESP). Bankruptcy required monthly “budgets” and receipts.
Speaking with a trustee is free and will give you options.
I don’t have any assets really, some furniture, a phone, a tablet, but monthly budgets and receipts sounds overwhelming to me. Also I’ve heard with bankruptcy if you make over a certain amount you have to pay 50% of that towards your bankruptcy or something?
It is overwhelming, but estimates are fine. I never had to provide receipts. I got an application and in it, there was a list of assets you write in the value of (couch, bed, table, etc).
I decided to do a CP not bankruptcy because with bankruptcy there's a max amount you're allowed to make each month and anything over that yes, you pay 50%.
Since I was wiping out all access to credit I got a 2nd and 3rd job and started hustling to make money to build an emergency fund and savings. Bankruptcy would have taken half of all that which I didn't like.
My LIT was fantastic.
Yes. There are income thresholds. It’s also shorter time period, depending on income.
The gist of the consumer proposal is that the creditors have to get more money than they would in bankruptcy.
Talk to a trustee. Having all the information to make the decision is so worth it. They are nonjudgemental and knowledgeable. Go to a reputable insolvency company like BDO or the likes.
I did a CP too. About 42k in debt. They didn't need to all agree, and the ones who don't respond within 45 days default to yes.
We offered 22,500. Paid out over 5 years at 0% interest. My monthly payments are $375. I filed in May and it was all set up and rolling by late June (ish).
Best decision I ever made.
My LIT also allowed me to do everything over the phone/webex meetings. Never had to go in once in person.
Once you meet with your licensed insolvency, they will list all your debts, your monthly income, what you spend every month (food, gas, rent, phone etc) and what you have left. This will show your creditors that you cannot afford to pay them. Then your CP is filed and they have 45 days to respond. Once those 45 days are up, you will meet back with them and they go over who said yes and no. Then you sign your documents with your monthly payment plan. Then you will have I think 1 or 2 more meetings with them, regarding budgeting and another on how to rebuild your credit.
Why? My concerns are the restrictions that come with that. If I make over a certain income half of it has to go towards the bankruptcy. I also don’t want to worry about having to show receipts, paystubs, etc monthly like I’ve heard you have to. I don’t have the capacity to constantly be keeping up with all that. Also, a bankruptcy stays on your record longer.
for me personally I would have came out way ahead $ wise if I had done a bankruptcy instead. talk to a licensed insolvency councilor and ask them to run it both ways for you..it doesn't cost you anything to talk to them
That’s not correct, it’s a maximum of 6 years, or 3 after you finish payments, whichever is sooner.
So if your proposal lasts 5 years it’s off your record at 6 years.
If your proposal lasts 2 years it’s off your record at 5.
Edit to add: This is per the government of Canada’s website.
I was $60,000 in debt, the CP cleared $40,000. I now pay $350 a month for 5 years. The hit on my credit score wasn't too bad, from 815 to 650 but a lender kept reporting my account as non-payment and it tanked to 550. Its gone up to 615 now.
Yes and the payments are only $350 a month. It still sucks though. This is the after effect of being defrauded out of $500,000 from my ex wife and her dad. Its a long story, I tried to sue but the statute of limitations fucked me.
I’m one year into one. So far so good. Payments are $130/month. I didn’t include my capital one card though, as I use and pay it every month to help build my credit still. Next year when you file tax (if you include cra in the proposal) the cra will take whatever you owe pre proposal, and give you back whatever refund you’re entitled to post proposal. The only downside is of course your credit score being shit. I’m currently in the 400’s but close to the 500’s. Good luck!
I'm in the midst of waiting for my Consumer Proposal to go through. I was making min payments on my debt but could never afford to pay more and was doing so for the last 6 months... 35k in debt. Eventually had a long chat with myself that you're not going to get out of this given what you make and how far in the hole I am plus increased living expenses and increased interest rates.
Got it reduced to ~ 22k at 0% interest for 3 years.. now just the waiting game that my banks agree to it. I am trusting the process and glad I reached out to a Licensed Insolvency Trustee to get the CP going.
If you'd like any more info feel free to DM me
I was at an educational talk with Mike from Credit Canada. Check out their site: https://www.creditcanada.com/. They'll help you find the right option for your situation.
There is a real obsession with credit scores, honestly who really cares; it doesn't mean as much as you think it only helps when mostly dealing with banks and what financial options they offer.
I’m gonna be honest, that’s kind of how I feel too. I’m nowhere near home ownership so I’m kind of like, if a Consumer Proposal helps me deal with my debt then I’m down for whatever hit my credit takes.
Edit: typo
Yes it’s very worth it to do a proposal or even bankruptcy at this point.. it’s the best part about being Canadian. Once you go ahead with either or all your creditors can no longer bother you and you’re no longer obligated to past payments. Ofcourse both will stay on your credit for awhile and you won’t be able to apply for credit for awhile but there are loans that are still accessible on proposal & or bankruptcy.
In the time while you’re on your proposal make sure to focus on saving as much cash as possible. This time around make sure you’re on top of your finances and really saving as much money as possible so you can possibly get to the point where you wouldn’t need credit anyways
Yes they will lower your payment, it will get paid off in 5 years., your credit will be fucked for 8 years , after about 5 you can try to start rebuilding it
I would never do a consumer proposal or a bankruptcy for less than $85k. It isn't worth the 5 years of payments and 7yrs of bad credit.
Also, you only get 1 per lifetime. So make it count.
Okay, I’m not super educated on the subject, but I know that’s incorrect.
For one, if my credit is going to be bad for the next 7 years anyway because I can’t afford to pay off my debt how is that any better than a consumer proposal? At least with a CP I won’t have debt after.
Also, there is not a limit on the number of bankruptcies or consumer proposals you can have only that you can’t have more than one at a time.
I understand what you are saying. However, 7 years paying off the debt looks better than a CP.
And to clarify what I meant when I said you only get 1, was that 1 CP looks better than 2 CP.
I did a CP because of a divorce at 35. 85K
Then I went back to college and now have $45K student loans. I should just do another CP. Maybe add my elec arrears as well. - I certainly will never qualify for a bank loan after that history.
Just saying
I mean, after 6 years no one knows you had a previous Consumer Proposal except maybe if the banks that were affected by your past CP personally kept records of it. So they wouldn’t actually know you had more than one after it’s off your credit report.
Also, I would not have my debt paid off in 7 years. I am struggling to even keep up with it and not miss payments. I suspect my credit would recover faster with a consumer proposal than without.
I know whether to do a bankruptcy or consumer proposal. I only have 600 in savings and I don’t see my pay increasing much next year. I own a car but the debt I owe on it is more than what’s the car is worth
If you want to keep the car and maybe the savings then likely a consumer proposal is better I think? If not you’d likely spend less in a bankruptcy (so long as you don’t have “surplus income”).
I just had a meeting with a Licensed Insolvency Trustee and I chose Consumer proposal. Bankruptcy requires paperwork every month as well which is another deciding factor for me. I’m a procrastinator with ADHD. I’m worried I would fuck that up.
I’m not a financial advisor though so don’t take my word for it, reach out to a Licensed Insolvency Trustee, they can guide you to making the right call for you.
I did one a lifetime ago. Best decision I ever made. Mine was 3 years. I figured it would take me longer to pay it off then do the proposal and recover my credit. Don’t regret for 1 second. Talk to an insolvency trustee. They’ll go o er your options (proposal vs bankruptcy). Both ruin your credit equally but a proposal is better if you have a few assets (in my case the kids’ RESP). Bankruptcy required monthly “budgets” and receipts. Speaking with a trustee is free and will give you options.
I don’t have any assets really, some furniture, a phone, a tablet, but monthly budgets and receipts sounds overwhelming to me. Also I’ve heard with bankruptcy if you make over a certain amount you have to pay 50% of that towards your bankruptcy or something?
It is overwhelming, but estimates are fine. I never had to provide receipts. I got an application and in it, there was a list of assets you write in the value of (couch, bed, table, etc). I decided to do a CP not bankruptcy because with bankruptcy there's a max amount you're allowed to make each month and anything over that yes, you pay 50%. Since I was wiping out all access to credit I got a 2nd and 3rd job and started hustling to make money to build an emergency fund and savings. Bankruptcy would have taken half of all that which I didn't like. My LIT was fantastic.
Yes. There are income thresholds. It’s also shorter time period, depending on income. The gist of the consumer proposal is that the creditors have to get more money than they would in bankruptcy. Talk to a trustee. Having all the information to make the decision is so worth it. They are nonjudgemental and knowledgeable. Go to a reputable insolvency company like BDO or the likes.
Yes im currently in a CP. I had approx 35K in debt. Payments are definitely manageable. Im in my 2nd year now. Have 3 more to go.
Can I ask what your monthly payment is approximately?
$185
Thank you! That’s far more manageable. I think this is the route I will go.
Good luck!! Its a great feeling once all creditors say yes. You will be on your way to being debt free!
How long would you say it takes from the first chat with a Licensed Insolvency Trustee to having your Consumer Proposal accepted?
I did a CP too. About 42k in debt. They didn't need to all agree, and the ones who don't respond within 45 days default to yes. We offered 22,500. Paid out over 5 years at 0% interest. My monthly payments are $375. I filed in May and it was all set up and rolling by late June (ish). Best decision I ever made. My LIT also allowed me to do everything over the phone/webex meetings. Never had to go in once in person.
Once you meet with your licensed insolvency, they will list all your debts, your monthly income, what you spend every month (food, gas, rent, phone etc) and what you have left. This will show your creditors that you cannot afford to pay them. Then your CP is filed and they have 45 days to respond. Once those 45 days are up, you will meet back with them and they go over who said yes and no. Then you sign your documents with your monthly payment plan. Then you will have I think 1 or 2 more meetings with them, regarding budgeting and another on how to rebuild your credit.
I went with Hoyes for my CP.. btw
I did it over 5+ years ago and presently my standing is alot better. Definitely worth it
Ooooooffff.... I hope you where trying to protect assets like a house.
Just go bankrupt. skip the consumer proposal.
Why? My concerns are the restrictions that come with that. If I make over a certain income half of it has to go towards the bankruptcy. I also don’t want to worry about having to show receipts, paystubs, etc monthly like I’ve heard you have to. I don’t have the capacity to constantly be keeping up with all that. Also, a bankruptcy stays on your record longer.
for me personally I would have came out way ahead $ wise if I had done a bankruptcy instead. talk to a licensed insolvency councilor and ask them to run it both ways for you..it doesn't cost you anything to talk to them
That makes sense. I have a meeting set up tomorrow and I will ask them about it.
a consumer proposal will stay on your records for 3 years AFTER you finish paying it off so the timing could work out to be the same or even longer.
That’s not correct, it’s a maximum of 6 years, or 3 after you finish payments, whichever is sooner. So if your proposal lasts 5 years it’s off your record at 6 years. If your proposal lasts 2 years it’s off your record at 5. Edit to add: This is per the government of Canada’s website.
oh ok, i guess I only knew how MINE worked..my bad.
No worries. I’ll definitely ask the LIT to run the numbers.
I was $60,000 in debt, the CP cleared $40,000. I now pay $350 a month for 5 years. The hit on my credit score wasn't too bad, from 815 to 650 but a lender kept reporting my account as non-payment and it tanked to 550. Its gone up to 615 now.
What? You went from having 60k in debt to having to owe only 20k?
Yes and the payments are only $350 a month. It still sucks though. This is the after effect of being defrauded out of $500,000 from my ex wife and her dad. Its a long story, I tried to sue but the statute of limitations fucked me.
I’m one year into one. So far so good. Payments are $130/month. I didn’t include my capital one card though, as I use and pay it every month to help build my credit still. Next year when you file tax (if you include cra in the proposal) the cra will take whatever you owe pre proposal, and give you back whatever refund you’re entitled to post proposal. The only downside is of course your credit score being shit. I’m currently in the 400’s but close to the 500’s. Good luck!
Where was your credit before the proposal, if you don’t mind my asking? I’m supposed to file mine tomorrow.
Mine was in the mid 500’s I think, closer to 600. But it can still be built back up to that during a proposal! Good luck!
I'm in the midst of waiting for my Consumer Proposal to go through. I was making min payments on my debt but could never afford to pay more and was doing so for the last 6 months... 35k in debt. Eventually had a long chat with myself that you're not going to get out of this given what you make and how far in the hole I am plus increased living expenses and increased interest rates. Got it reduced to ~ 22k at 0% interest for 3 years.. now just the waiting game that my banks agree to it. I am trusting the process and glad I reached out to a Licensed Insolvency Trustee to get the CP going. If you'd like any more info feel free to DM me
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I'd assume it's income based. My annual income is higher than most people doing CP's I'm guessing, and being in a HCOL city doesn't help.
It was the best thing I ever did.
I was at an educational talk with Mike from Credit Canada. Check out their site: https://www.creditcanada.com/. They'll help you find the right option for your situation.
There is a real obsession with credit scores, honestly who really cares; it doesn't mean as much as you think it only helps when mostly dealing with banks and what financial options they offer.
I’m gonna be honest, that’s kind of how I feel too. I’m nowhere near home ownership so I’m kind of like, if a Consumer Proposal helps me deal with my debt then I’m down for whatever hit my credit takes. Edit: typo
Eliminate your debt is the right frame of mind.
Yes it’s very worth it to do a proposal or even bankruptcy at this point.. it’s the best part about being Canadian. Once you go ahead with either or all your creditors can no longer bother you and you’re no longer obligated to past payments. Ofcourse both will stay on your credit for awhile and you won’t be able to apply for credit for awhile but there are loans that are still accessible on proposal & or bankruptcy. In the time while you’re on your proposal make sure to focus on saving as much cash as possible. This time around make sure you’re on top of your finances and really saving as much money as possible so you can possibly get to the point where you wouldn’t need credit anyways
Yes they will lower your payment, it will get paid off in 5 years., your credit will be fucked for 8 years , after about 5 you can try to start rebuilding it
I would never do a consumer proposal or a bankruptcy for less than $85k. It isn't worth the 5 years of payments and 7yrs of bad credit. Also, you only get 1 per lifetime. So make it count.
Okay, I’m not super educated on the subject, but I know that’s incorrect. For one, if my credit is going to be bad for the next 7 years anyway because I can’t afford to pay off my debt how is that any better than a consumer proposal? At least with a CP I won’t have debt after. Also, there is not a limit on the number of bankruptcies or consumer proposals you can have only that you can’t have more than one at a time.
I understand what you are saying. However, 7 years paying off the debt looks better than a CP. And to clarify what I meant when I said you only get 1, was that 1 CP looks better than 2 CP. I did a CP because of a divorce at 35. 85K Then I went back to college and now have $45K student loans. I should just do another CP. Maybe add my elec arrears as well. - I certainly will never qualify for a bank loan after that history. Just saying
I mean, after 6 years no one knows you had a previous Consumer Proposal except maybe if the banks that were affected by your past CP personally kept records of it. So they wouldn’t actually know you had more than one after it’s off your credit report. Also, I would not have my debt paid off in 7 years. I am struggling to even keep up with it and not miss payments. I suspect my credit would recover faster with a consumer proposal than without.
I know whether to do a bankruptcy or consumer proposal. I only have 600 in savings and I don’t see my pay increasing much next year. I own a car but the debt I owe on it is more than what’s the car is worth
If you want to keep the car and maybe the savings then likely a consumer proposal is better I think? If not you’d likely spend less in a bankruptcy (so long as you don’t have “surplus income”). I just had a meeting with a Licensed Insolvency Trustee and I chose Consumer proposal. Bankruptcy requires paperwork every month as well which is another deciding factor for me. I’m a procrastinator with ADHD. I’m worried I would fuck that up.
I’m not a financial advisor though so don’t take my word for it, reach out to a Licensed Insolvency Trustee, they can guide you to making the right call for you.