In today’s uncertain environment, creditors are more flexible than ever.

If you’re facing financial distress, now is the time to consider filing a consumer proposal and making an offer to your creditors to settle your debts for less than what you owe.

In most cases, you can even keep your home and ensure that your assets remain untouched!

Client Success Story – Reducing $100,000+ Debt to $12,000

If you’re wondering if this works, we are sharing a client success story to show you what is possible.

One of our clients, from Vancouver, is a self-employed professional who owed money to CRA after being reassessed.

His total debt was over $100,000. After an evaluation, it was ascertained that he owed $65,000 to the CRA in personal income tax and GST and had credit card debt exceeding $44,000.

With COVID-19 disrupting his earnings, he was relying on the CERB payments being made to him.

As there was no home equity to pay off debts, he was wondering if he should just opt for a $1,800 bankruptcy to start over.

We worked with him to help him evaluate all his options and developed a proposal.

Taking advantage of the current climate, we helped him reduce his debt to $12,000. He is now able to pay this debt back within 5 years at 0% interest!

Will a Consumer Proposal Pay Off Debt?

So yes, a consumer proposal can help you pay off your debt. It can also stop any collection action and protect your assets.

Though it does impact your credit rating temporarily, two years after your proposal is paid in full, your credit score can bounce back if you’re taking steps to ensure that you’re making timely payments.

It is important to note that a consumer proposal is only available for unsecured, non-mortgage debts between $8,000 to $250,000. If you are carrying more debt than that, you may have to consider another type of proposal or file for bankruptcy. You can learn more about the differences between consumer proposals and bankruptcies here.

Deciding what works for you, depends on your circumstances. The answer is based on some of these questions:

• How much total debt do you have?
• How much unsecured debt are you carrying?
• What’s the worth of your assets?
• Are you able to repay a portion of your debt?

At DebtCare, we will help you answer these questions and help you develop an action plan to reduce and ultimately eliminate your debt.

Contact us today for a free consultation and an independent review of your financial situation. Call us on 1-888-890-0888 or visit www.debtcare.ca.