debtcare.ca

Category: Consumer Debt

  • Get Debt Help Without Leaving the House – Here’s How

    In the past, before the novel coronavirus (COVID-19) people might have gone to see a financial consultant in person for debt help or otherwise, but with social distancing in effect, that is not advised right now unless absolutely essential.

    However, debt help is more necessary than ever right now. The impact of COVID-19 has left many Canadians out of work and struggling to pay bills.

    A report from the Canadian Centre for Policy Alternatives warns the unemployment rate could rise to 13.5%, the highest level since the Second World War.

    In one week, more than 500,000 Canadians applied for employment insurance (EI). The government is also expecting more than 4 million applicants for the recently announced Canada Emergency Response Benefit (CERB).

    While some government help is available — such as emergency caregiver assistance and a wage subsidy for eligible employers — these programs are still rolling out and there may be a waiting period to receive funds. And for many, the assistance provided may not be enough to get by.

    Dealing with Debt to Free Up Finances

    Debt payments take up a large chunk of Canadian budgets. According to Equifax Canada, the average Canadian carries $72,950 in debt. $23,800 of that is non-mortgage debt (which includes credit cards, loans and lines of credit).

    Even carrying a little bit of debt can stretch your budget, especially when your income is reduced. Do you want to be putting your limited income towards credit card payments?

    When every penny counts, it’s better to make that money work for you — instead of using it to repay past expenses.

    The time to deal with debt is now, particularly if you have been laid off or your income has been affected by COVID-19 or otherwise.

    While everyone is frightened and worried (and rightfully so), the current situation and loss of income will allow people to get much lower deals on their debts as their income has been reduced. Most creditors will be accepting any reasonable offer.

    If you wait until your income has returned, the opportunity to have your debt reduced to the same extent will be gone.

    How to Get Debt Help Online

    The key to getting debt help online — without leaving your house — is knowing what you are looking for.

    You want to find:

    • A debt consultant that has an established reputation (meaning you can trust their services — this is especially important when you cannot visit their offices due to social distancing).
    • A debt consultant that works in your part of the country or nationally.
    • A debt consultant set up for remote access — with social distancing, you shouldn’t have to go into an office.
    • A debt consultant that will review all your options.

    We can only speak to our services at DebtCare Canada, but we provide exactly that. We’ve helped thousands of Canadians deal with their debt and get their finances back on track.

    We act solely in your interest to ensure that you get the best possible results by utilizing federal government programs and other financial solutions to help you deal with your debt with dignity.

    Our reputation is trusted and secure. We operate nationally and remain fully functional during the COVID-19 pandemic through remote operations.

    How to Contact DebtCare Canada Remotely:

    We know this is a stressful time and we want to assure you that DebtCare is here for you. If you are struggling, please reach out. 

    You can also follow us for regular information related to dealing with your finances during COVID-19 and beyond. DebtCare is on Twitter, Facebook, and LinkedIn.

    Learn more about our services at https://debtcare.ca/.

  • COVID-19 Income and Debt Help for Canadians

    The past two weeks have been a non-stop train of breaking news as Canada copes with the novel coronavirus, COVID-19.

    This public health pandemic is affecting many across the country — both medically and financially.

    In order to “flatten the curve” and reduce the risk of infection, many businesses and public services have been suspended, including in some provinces:

    • Public and private school closures.
    • Daycare closures.
    • Eat-in restaurant closures (take-out and delivery are still available).
    • Temporary closure of non-essential businesses, such as clothing retailers.
    • Temporary closure of public event spaces, such as movie theatres.
    • The list goes on…

    While all of these measures are meant to reduce COVID-19 risk and pressure on our healthcare systems, it has created another challenge: financial difficulties.

    Many Canadians are now out of work, or unable to work due to the need for childcare or caring for those who are ill. While some are working from home, not everyone has that opportunity.

    Businesses are also feeling the loss of income, and some have had to lay off employees temporarily.

    While public safety is essential, there is no denying the challenge this has had on the Canadian economy — and that’s where emergency relief comes in.

    Emergency Response Package

    On March 18, 2020, Prime Minister Justin Trudeau announced an economic aid package of $82 billion. This includes:

    • A temporary boost to Canada Child Benefit payments.
    • A new Emergency Care Benefit of up to $900 biweekly, up to 15 weeks, to provide income support to workers who have to stay home and don’t qualify for paid sick leave or employment insurance (EI). This includes those who are self-employed.
    • A new Emergency Support Benefit to provide up to $5 billion in support to workers who are not eligible for EI and who are facing unemployment.
    • A six-month, interest-free reprieve on student loan payments.
    • The income tax deadline has been extended to June 1, 2020 and taxpayers can defer tax payments until August 31.
    • And more.

    Mortgage Payments Deferrals

    The Big 6 Banks announced on March 17 and 18 that they are taking measures to support customers on a case-by-case basis to provide solutions, including up to a six-month payment deferral for mortgages and the opportunity for relief on other credit products.

    This is meant to help those who are facing challenges due to COVID-19, such as pay disruption, childcare disruption, or illness.

    Customers are encouraged to reach out to their lenders to ask what assistance there is for them.

    Bank of Canada Interest Rate

    On March 13, 2020, the Bank of Canada announced an emergency interest rate cut to 0.75% — the lowest that it has been since 2017.

    “It is clear that the spread of the coronavirus is having serious consequences for Canadian families, and for Canada’s economy,” the Bank said.

    The next Canadian interest rate announcement is scheduled for April 15, 2020. Economists are predicting the interest rate will be cut again.

    The lower interest rate means that credit is easier to secure — and is especially helpful for variable-rate debts, such as variable-rate mortgages, credit cards, or unsecured lines of credit.

    Putting It All Together — and Dealing with Debt

    Let’s talk for a moment about the impact of all of this. While these are good measures temporarily, we must acknowledge that they are not necessarily long-term solutions.

    For people relying on a certain amount of income to meet their bills, $900 biweekly is likely not enough to cover their expenses.

    And then there is the matter of deferrals — whether that be deferring mortgage payments, student loans, income tax payment, or otherwise.

    These payments will still need to be made eventually. Some of the details have yet to be confirmed, but consumers need to be aware that these payments are not just disappearing. These methods are meant to give you time to get the money together, when hopefully the economy is recovered, along with public health.

    But (and there is a big but) the money will still be owed. You will still need to find the funds.

    If you are currently earning less than you usually make due to COVID-19, or have a hard time meeting your bills regardless, other measures may need to be taken to get your finances on track.

    These might include:

    • Creating a budget and tracking expenses.
    • Avoiding taking on more unnecessary debt, such as charging expenses to your credit card.
    • Consolidating debt payments and paying off high-interest debt.
    • Filing for insolvencies, such as bankruptcy or consumer proposal.

    Take the time now to make a plan for your finances during the COVID-19 pandemic. If you are on the brink, contact a debt counsellor today.

    Debt can weigh down your lifestyle, particularly when money is tight. If you have $10,000 in credit card debt, those payments can take away from your ability to pay the mortgage or rent, buy groceries, or pay utility bills. When every dollar counts, you don’t want any more than necessary going towards your debt payment.

    At DebtCare Canada, we remain available by phone, text, or online across the country. We will talk through your financial options with you and help you find the best path forward for your unique situation during the COVID-19 pandemic or otherwise.

    Contact us for a free consultation. Call or text “Help” to 1-888-890-0888 or visit www.debtcare.ca.

  • Bankruptcy and Consumer Proposals Rise as Consumer Debt Reaches Record Limits

    Are you struggling with consumer debt? If so, you’re not alone.

    According to BNN Bloomberg, the average Canadian household owes $1.76 for $1 of annual disposable income. The same household devotes $0.15 of every disposable dollar to making principal and interest payments on debt, which is a record high.

    BNN Bloomberg also noted that when you add together consumer credit, mortgage, and non-mortgage debt, Canadians are carrying $2.28 trillion in credit market debt.

    What’s more, beyond just carrying debt, they’re paying the price. The number of insolvencies – bankruptcies and consumer proposals – filed by consumers in 2019 increased from the year before.

    While the numbers for the final quarter of 2019 have not been released yet, as of Q3 2019, Canadian insolvency filings were up to 34,708 — up more than 4,000 over Q3 2018. Of that, the number of bankruptcies rose slightly (from 13,549 to 13,757) and the number of consumer proposal filings rose substantially, going from 16,764 to 20,951.

    Why are more Canadians going into debt?

    According to a survey from Manulife, two in five Canadians believe they will never be debt-free.

    There are many reasons Canadians might currently be struggling with debt. Housing prices are continuing to rise, especially in larger cities like Toronto and Vancouver.

    While interest rates have stayed the same for the past year, the added spikes in 2017 and 2018 still didn’t help for those carrying debt. Some have also speculated that it’s too easy for Canadians to gain access to credit – and spend more than they can afford to pay back.

    For others, job insecurity can be part of it – not enough income to make ends meet. They might be facing job loss, working in a precarious employment situation (like the gig economy) with inconsistent income, or simply not earning enough to afford high housing prices.

    Poor credit habits can hurt your finances, too. While paying only the minimum balance on your credit cards can seem like a good idea, it can actually mean more debt in the long-term.

    Sometimes the moments leading up to major debt troubles are insidious. What can start as a seemingly harmless action can snowball into a much bigger problem.

    What exactly does struggling with debt look like? It could include:

    • Being unable to pay all your bills in full and on time each month.
    • Making only the minimum payments each month.
    • Being unable to make even the minimum payments.
    • Having more debt than income.
    • Always taking out another loan to pay off your old debts, getting into an unsustainable cycle.
    • Relying on credit to pay all your bills because you don’t have enough funds in your bank account.
    • Consistently being unable to afford the items you need to achieve a daily quality of life – pay for groceries, afford your rent, and so on.
    • Living paycheque to paycheque without knowing how you would afford an emergency.
    • And more…

    This might vary depending on your exact circumstances, but any of these could be a precursor to bigger problems down the road.

    How to deal with debt before major damage is done

    The sooner you realize you have a debt issue, the more likely you are to resolve it before major damage is done to your quality of living.

    When you file for insolvency, your credit score takes a big hit. While this is sometimes the best option, and it is possible to recover over time, if you tackle your finances early you minimize the need for this type of action.

    Some steps you can take to resolve problem debt include:

    • Creating a realistic budget and looking for ways to reduce your current expenses, then putting the savings towards paying off your debt.
    • Honestly assessing where your money is currently going and eliminating wasteful spending.
    • Practicing good financial habits, like always paying your bills on time and in full.
    • Not relying on credit. While some use of credit is good for your credit score, you don’t want to be using it because you don’t have the money elsewhere.
    • If you have an income problem, looking for ways to earn more – either through asking for a raise, finding a new job, or getting a part-time job.
    • Seeking out debt consolidation methods, such as mortgage refinancing.

    While filing for insolvency is one option, it’s not the only option – especially if you tackle the problem early.

    In 2020, make your resolution to figure out your finances for good. Debt freedom is possible with a little planning. There’s no point feeling bad about the circumstances that got you into debt. Instead, realize you’re not alone and focus on finding the way out.

    That’s where we come in. At DebtCare Canada, we will assess your situation and make recommendations to deal with debt. We’ll go over your options and create a realistic plan for success.

    Contact us today for a free consultation. Call 1-888-890-0888  or visit www.debtcare.ca.

  • Dealing with Holiday Debt in 1-2-3

    The holiday season is officially behind us and that means kids are back at school, the parties are over, and the decorations have been taken down. It also means that the holiday bills are on their way if they haven’t already arrived. We all want to give our families a great holiday, and often that means shelling out a significant amount of money on gifts and food and everything else required for the perfect holiday, but this desire can also result in significant financial stress. Today we talk dealing with holiday debt.

    When ready cash is unavailable, many families turn to their credit to manage shortfalls over the holidays. This can result in an endless stream of credit card bills come January – credit card bills that can quickly become difficult to handle, especially when you consider the rate at which interest accumulates, particularly when you’re only making minimum payments.

    Thinking about how you will get on top of all these bills? Here are some consolidation options that can help when it comes to dealing with holiday debt:

    • A loan. If you have good credit, a loan can help to merge all of those high interest debts into one, manageable monthly payment. However, if you have bruised credit or a great deal of debt, a loan will be difficult to obtain and thus may not be the best option. Additionally, if a loan is on the table even with bruised credit or a mountain of debt, you may be looking at an interest rate of 20-30%, which may be even higher than the ones you currently have.
    • Refinancing your home. If you have equity in your home, refinancing your home can be a great choice for dealing with holiday debt. Refinancing your home will often result in lower interest rates and more flexible repayment terms.
    • Government programs. There are programs made available by the government to help reduce debt and consolidate those numerous payments into one single payment. These programs will also mean freezing interest. The ability to take advantage of these programs largely depends on your personal financial circumstances and reasonable ability to repay your debt.
    • An example of a government program is a consumer proposal. A consumer proposal is an intelligent method for dealing with holiday debt. A consumer proposal involves filing a proposal with all of your creditors, who then need to accept it. Once accepted, your debt may be reduced and all payments are combined into one monthly payment.

    Prior to making a decision, the best approach is to have a financial assessment completed by a financial consultant who can look at your finances and help to arrange the most effective option.

    Don’t let the thought of dealing with holiday debt keep you from making plans for the new year.

    Call DebtCare today at 1-888-890-0888 – we can help.

     

  • Canadian Consumer Debt News: $200 Increase Could Spell Disaster for Many

    We are continually on the watch for news about Canadian consumer debt and the impacts of certain market conditions such as interest rates and a booming housing market. This week is no different.

    Last week, the Huffington Post released this alarming article regarding debt levels, entitled “Canadian Debt Levels Would Crush Them If They Were $200 Higher Per Month: Survey.” Discussed within the article is a survey done by consumer insolvency firm MNP Ltd.

    The survey results leave much to be desired. According to the responses of the over 1500 Canadians, 56% said they are only a couple hundred dollars from a debt crisis.

    Another 52% said they are worried about their current debt levels, while half of the individuals surveyed said that they regretted owing so much money. An additional 38% said raising interest rates could leave them on the verge of bankruptcy.

    Check out the article in full here: http://www.huffingtonpost.ca/2016/09/28/canadian-debt-levels_n_12235290.html.

    If you find yourself reading the article and counting yourself among the group highly concerned about your current debt levels, it might be time to consider alternatives.
    At DebtCare, we know how important it is to feel financially secure. With the current economy and Canadian consumer debt levels sitting at all-time highs, don’t leave yourself vulnerable.

    Call us today at 1-888-890-0888.

     

     

     

     

     

     

  • What to do Before Canadian Interest Rates Rise?

    canadian-interest-rates-smWhen it comes to the Canadian economy, the last few years have been a whirlwind of activity. Record low oil prices which hurt the economy and a dollar which fell to levels we haven’t seen in years led the Bank of Canada to drop Canadian interest rates to record lows.

    For some, a lower interest rate has been a good thing – the ability to afford more and spend less – but for others the trouble will come when those rates rise.

    What will happen when rates go up? CBC News tackled this question in a really interesting article recently – Bank of Canada must open people’s eyes to debt sinkhole danger. You can check it out here: http://www.cbc.ca/news/business/debt-bank-of-canada-poloz-housing-1.3621994. With people buying houses left, right and centre, the mortgage bubble is set to burst and the results could be disastrous.

    Think about it this way: the average price of a home in Canada is now more than a million dollars. That’s a lot of money. Even much more modest homes, though, can be seriously impacted by a rising interest rate. For example, a 2% increase in interest on a $300,000 mortgage amortized over 25 years would mean a $300 per month increase in your mortgage payment! For many Canadian families, that $300 could be the difference between affording a mortgage and losing the house.

    In fact, the impacts could be so significant that economists have speculated that the only thing that could take down the Canadian housing market would be rising interest rates.

    Since the average Canadian household is carrying heavy mortgage payments coupled with record levels of consumer debt, the best thing to do before Canadian interest rates go up is to get rid of that debt. Interest rates may not go lower than they are right now so now is actually the perfect time to use your home equity to deal with the debt.

    A second mortgage, structured more like a loan than a mortgage, with a short amortization period, can help you consolidate all of those other debts that are costing you more in interest than actual payments on balances, and because a second mortgage is separate from your first you are not required to overcome the fees or penalties to refinance.

    So, before interest rates rise and you find yourself struggling to pay your mortgage thanks to all of those monthly debt obligations, get rid of them. DebtCare can help.

    Call us today at 1-888-890-0888.

     

  • Is a Debt Consolidation Loan the Answer to Holiday Debt?

    debt2You made it through the holidays and now the credit card bills are rolling in. You went a little over your original holiday budget (don’t we all?), and now the credit cards are maxed out with no real way to pay them off. Perhaps you’ll just make the minimum payments for a while, until you’re back on your feet and feeling more secure – but will that ever happen? Do most of us actually have that extra cash each month to cover those bills? Probably not, since we wouldn’t rely so heavily on credit cards for holiday purchases if we did.

    Ok, so what is the problem with just paying the minimum payment? At least the bill is being paid, right? Sure, you’re paying the bill, but those monthly payments are comprised mainly of interest, meaning your actual balances decrease by mere pennies – and don’t ever really go down.

    This seems pretty negative so far, we know, but it is about to get better. Instead of just paying the minimum payments and not getting anywhere, consider a debt consolidation – this is a great way to save interest and get rid of those balances.

    If you own your own home, you’ve got access to a consolidation product that can save you a lot of money and time. Using your home is one of the cheapest ways to consolidate debt – but a regular mortgage can mean long terms and higher interest. Instead, go for one that is handled more like a loan.

    For example, if $20,000 is required to pay off your debt, and you’re considering a normal second mortgage, your broker will amortize that debt into the first or second mortgage and stretch it over 25 years. That means that you are paying interest on $20,000 for 25 years – when that is largely unnecessary.

    Instead, when you work with a company that finds a mortgage product that works more like a loan, one that does not involve your first mortgage in the process, the issues with amortization and interest disappear. For example, a 5 year amortization and 5 year “open” term mean the debt is done in 5 years or less at your option, your first mortgage is not disrupted and you are not paying that interest for a long period of time – and that interest is lower than most other debt consolidations because it is a mortgage.

    If you want to start 2016 on the right track financially, a debt consolidation loan may just be the answer to dealing with those holiday bills – and a mortgage that is structured more like a loan is a great way to do it!

    For more about a mortgage-style debt consolidation loan please call DebtCare today at 1-888-890-0888.

     

  • Need to Know: What is a Consumer Proposal?

    debt1It is no secret that many Canadians struggle with debt. The ease with which credit is granted, followed by the difficulty in trying to resist the temptation to buy what we perhaps can’t necessarily afford, means that Canadian consumer debt seems to continually grow, even when we are continually cautioned.

    With this consumer debt comes the need for debt relief. Debt relief can take many forms, some more well-known than others. This week we are looking at one of the most popular forms, the consumer proposal, and answering a common inquiry: what is a consumer proposal.

    Similar to a bankruptcy, a consumer proposal is a legal solution for dealing with debt. That being said, it is not a bankruptcy, and in many cases individuals find consumer proposals to be better when it comes to assets. For example, many people who opt for consumer proposals are able to keep their homes or cars.

    So, what is a consumer proposal? When you are in debt, and can’t seem to get any traction as far as paying it off, you may choose to make a proposal to your creditors, based upon an income and asset calculation. This is a consumer proposal. In this proposal, you offer to pay creditors either all or a certain percentage of the debt owed, monthly, over a term of typically 4-5 years. The amount of your proposal is based upon your income/assets and your ability to pay.

    Once this proposal is presented to your creditors, they have a finite period of time to vote to accept or reject it. Once accepted, this becomes a legally binding contract between you and your creditors, and you begin making the monthly payments.

    Benefits of a consumer proposal:

    • Debt is usually reduced in a proposal but even if it is not the proposal will stop interest from accumulating.
    • A consumer proposal stops collection action being taken by unsecured creditors, such as wage garnishments, frozen bank accounts, etc…
    • A consumer proposal can be paid in full at any time, and will be removed from your credit report 3 years following the date in which it is paid in full.

    A consumer proposal is a legal solution, one covered under the Bankruptcy and Insolvency Act, and while it is not a bankruptcy, it is administered by a trustee.

    Something to keep in mind: a bankruptcy trustee is an administrator who earns money based on the size of the proposal negotiated. They do not represent you – they are a court appointed officer with a job to ensure that you make a proposal that is a win for your creditors. This can be confusing because many trustees advertise solutions as though they represent you, when in fact they are more subjective than that, and often working for their own best interests.

    A proposal is a good solution, but you should not make one through a trustee unrepresented. A representative represents you so you can speak openly without consequence. A representative can negotiate the deal on your behalf with the trustee, and can often negotiate a more competitive deal than had you gone directly to the trustee.

    So, what is a consumer proposal? A very viable debt relief option – but one that you should know all about before contacting a trustee. Call DebtCare today – we represent you, not your creditors. 1-888-890-0888.

     

  • Does a Consumer Proposal in Canada Stay on Your Credit for 7 Years?

    debt care1Many people choose a consumer proposal in Canada to get finances back on track. These represent a great debt relief option because you can settle your debt, often reduce the total balance to be repaid, freeze interest and consolidate the various monthly bills into one single, monthly payment.

    Of course, as with any debt relief solution, there are implications for your credit, and we are often asked what those implications are. Many individuals come to us with a fear that a consumer proposal will ruin their credit for the long term, and leave happy knowing that this isn’t actually the case. Often the pros far outweigh the cons, especially when you consider the fact that your credit is likely already not so stellar – coupled with the fact that a CP can save you thousands of dollars and stop self-serving creditors from continually harassing you.

    When it comes to consumer proposals, by far the question asked most often is “how long does it stay on my credit report?” The answer is fairly simple, but the length of time really depends of you. Many think that a CP is just like a bankruptcy – on your credit report for 6 years following the date of discharge – but this is not the case.

    In a nutshell, a proposal is on your credit for 3 years from the date it is paid off in full. The faster you pay off the proposal, the faster it is off your credit report.

    Here is a handy chart to help show you how to calculate how long a CP will be on your credit:

    Paid of immediately On your credit report for 3 years overall
    Paid off one year after filing On your credit report for 4 years overall
    Paid off two years after filing On your credit report for 5 years overall
    Paid off three years after filing On your credit report for 6 years overall
    Paid off four years after filing On your credit report for 7 years overall
    Paid off five years after filing On your credit report for 8 years overall

    A consumer proposal in Canada is not like bankruptcy where you have an ongoing obligation to your trustee pending a discharge. Once creditors agree to a proposal, it is binding and can be paid off at any time. Or, you can choose larger monthly payments to get it paid off faster – the choice is up to you and your own personal situation.

    Once you have negotiated a proposal and it has been accepted, start rebuilding your credit quickly with a secured credit card. This will help you establish good credit behaviour and show future lenders that you are committed to getting back on track.

    Also, make sure that you stay on top of your credit report. Ensure that the credit reporting agencies are aware that you have filed, and also that it has later been paid off – don’t just assume that they have been made aware. Consider sending letters of discharge through registered mail.

    Rather than being a credit rating killer, a consumer proposal is actually a great way to begin the process of getting your credit rating back on track. By consolidating all payments and reducing principal, you can get back on your feet, and don’t have to worry about long term impacts.

    For more about filing a consumer proposal in Canada, or to discuss other options for debt relief, call DebtCare Canada today at 1-888-890-0888.

  • Filing a Consumer Proposal in Canada – Does it Make the Most Sense for You?

    shutterstock_53579857The frequency with which Canadians are filing consumer proposals in order to get back on solid financial ground has increased significantly in the last few years. The reason is fairly obvious; the ability to stop collection action, halt interest, combine all payments into one, and often to negotiate for a smaller repayment amount, make filing a consumer proposals in Canada a very attractive debt relief option.

    However, because a consumer proposal is a solution for dealing with financial problems, some assume that individuals on the lower end of the income scale with limited assets are the most likely candidates for a proposal. It is actually quite the opposite – often consumer proposals in Canada are filed by higher income earners.

    Why? A major factor is the fact that, a few years ago, bankruptcy laws in Canada changed.

    Higher income earners – Now there is an income and expense calculation (which is very low by the way) that looks at whether you earn more than a basic amount. If you do, 50% of any additional income is surplus income in a bankruptcy, so a higher income earner ends up having massive monthly payments. Also, if you have surplus income, you have to make monthly payments in bankruptcy for 20 months as opposed to 9 months (the limit if you are under the income/expense limit).

    Homeowners – Believe it or not, in bankruptcy and in consumer proposals, many people are able to keep their homes! In a bankruptcy though, home equity is considered surplus income and so 50% of that equity has to be repaid. Instead, many homeowners opt for a proposal because it is a negotiated settlement so there is room to negotiate that less equity be repaid.

    In a consumer proposal, you offer your creditors a sum that you will repay that covers all unsecured debt. As soon as a consumer proposal is filed, the creditors have a specified amount of time to accept or reject. Creditors who don’t answer are considered as accepting. As long as creditors representing 51% of the debt accept, the proposal goes through.

    If accepted, the person has to make a minimum payment equal to the amount of the proposal divided over 48 or 60 months. That said, a consumer proposal can be paid in full at any time which also makes it more attractive to higher income earners, especially those who get large annual bonuses.

    An additional reason for the attractiveness of a proposal is the impact it has on your credit rating. If paid off within 1 month to 3 years, a consumer proposal ends up being on your credit less time than a bankruptcy.

    If you are struggling with debts and the threat of collection action, call DebtCare Canada today. Filing a consumer proposal may just make the most sense for you! 1-888-890-0888.