Are your COVID-19 government benefits coming to end? We have the information you need to prepare.
Renfi Capital is a lender that specializes in home renovation loans. It is the fastest mortgage lender in Ontario. They offer loans ranging from $25,000 to $150,000, with interest only payments at the low rate of 1% per month. Renfi works with a much wider range of credit types than conventional lenders.
Their platform is entirely online, making it easy, fast and secure.
- $25,000 - $150,000 loans
- Low credit scores accepted
- Low rate of 1% a month
- Open loan
Apply in 3 minutes, fully online process
15 minute approval, 72 hour funding
256 bit, end to end encryption
While Canada is a great place to live, many of its residents struggle with high levels of debt. There are many reasons for this with one of the major ones being the cost of living. In particular, Ontario struggles with very high rental and real estate prices, which can lead to financial issues for many consumers.
Even a city like Brampton is feeling the effect as it is among the most expensive places to rent in the entire country. Residents in these expensive areas can find themselves drowning in debt, and often unable to stay afloat.
If you’re currently struggling with excessive debt, a consumer proposal could be the solution you need.
What is a Consumer Proposal?
So what exactly is a consumer proposal in Brampton? A consumer proposal is a legal process and agreement between you and your creditors. It is an agreement to pay back a certain percentage of your total debts, but receive full forgiveness.
How much you actually end up paying back depends on a number of factors. For example, the negotiation process, how much you owe, the creditors you’re in debt to, and even how much you make. It lets you get rid of your debts without paying them off in full, and without having to sacrifice any of your assets or belongings.
Once your consumer proposal has been filed, you are safe from debt collectors, as well. Other benefits that a consumer proposal provides is the end of interest accumulation and wage garnishment.
What is a Licensed Insolvency Trustee and How to Find the Right One?
In order to actually file a consumer proposal in Brampton, you need to enlist the help of a Licensed Insolvency Trustee (LIT). A LIT is the only person who can legally file a consumer proposal. They are educated and experienced individuals who are regulated by the federal government.
Most either work for themselves, or are members of a larger firm. In addition to working with consumer proposals, many Licensed Insolvency Trustees also provide other types of debt relief. Before ever filing a consumer proposal, you should meet with a LIT and go over your financial history and the options available to you.
So, how do you choose the right LIT to work with? Here are a couple of points to consider when choosing a LIT:
- Ensure they are legitimate and actually licensed to file bankruptcies and consumer proposals in your area
- Make sure they have a good track record and solid experience
- Make sure that you are comfortable working and sharing details about your finances with them
- Ensure that any fee or payments you are being charged are correct
By keeping things like this in mind, you will be well on your way to finding the right Licensed Insolvency Trustee for your unique situation.
The Consumer Proposal Process in Brampton
Now that you know a bit about consumer proposals in Brampton, how exactly does the process work and what should you expect? Well, the process begins by first choosing and meeting with your Licensed Insolvency Trustee. The two of you will go over your options and see if a consumer proposal makes sense for you or not (learn more about the consumer proposal initial assessment here).
Once you have arrived at the decision that a consumer proposal is the best option, you now need to craft that proposal. The proposal amount you make will depend on what you owe, what you make and your financial needs and situation.
When you have come up with a proposal you feel is fair, your trustee will send the proposal to your creditors. Because you might have more than one creditor, the creditor that is responsible for holding the majority of your debt will need to agree to the proposal and accept it for it to be considered valid.
If your proposal is accepted, you will have 5 years to make the agreed-upon payments.
How long does it usually take for a consumer proposal to be accepted? Find out here.
How Does Filing a Consumer Proposal Affect Your Credit?
An important thing to know about a consumer proposal in Brampton is how it will affect your credit. Your credit report and credit score are incredibly important when you try to borrow money in any capacity. While a consumer proposal isn’t great for your credit, it is also not as bad as bankruptcy would be.
In Canada, each of the credit accounts that appear on your credit report receives their own rating between 1 and 9. A credit rating of 1 means that the account is in good standing and a rating of 9 means the account is apart of a bankruptcy. A consumer proposal will get you a rating of 7. This rating will stay on your credit report for a total of three years after making your final proposal payment.
So while it will do some damage to your credit, that damage is much less than with a bankruptcy. As a result, a consumer proposal is something you should consider before ultimately deciding to go bankrupt. Also, it is often worthwhile to take the credit hit in order to finally escape from your debt troubles.
Rebuilding your credit after a consumer proposal is completely possible, and some ways to do it include:
- Using credit cards responsibly and only borrowing money you can afford to pay back
- Making all of your payments on time and in full
- Not closing old credit accounts
- Consistently checking your credit report for potential errors
- Keeping credit utilization low
While these won’t have an immediate impact on your credit score and won’t fix your credit issues overnight, they will help you improve your situation over time. Building up your credit is not magic, and will certainly take some sacrifices and lifestyle changes.
When Should Someone Consider Filing a Consumer Proposal?
In order to actually file a consumer proposal, there are a few requirements. You must be a resident of Canada, must be unable to pay off your debts in full and your debts must be over $5000, but under $250,000 (mortgages aren’t counted here, however). Also, you must have a stable and decent income to ensure you are able to make the proposal payments each and every month.
But just because you can file for one, doesn’t always mean that you should. You should speak to your trustee and see if it is the right choice for your situation. There are many other options to consider such as debt settlement, credit counselling, or debt consolidation. Even bankruptcy may be a viable alternative in some situations for some individuals.
Can you pay off your consumer proposal with a loan? Learn more here.
What Debts Can Be Included in a Consumer Proposal?
While a consumer proposal in Brampton can be a great tool to help people get out of debt and improve their finances, it’s not perfect. It is not the right solution for everyone, and a big reason for this is because not all debt can be included in a consumer proposal. While most unsecured debts can be included, secured debts cannot.
This means things like car loans, mortgages and any other secured loans you have cannot be present in any consumer proposal. You will need to continue paying these loans off, or risk losing the collateral. Some individuals might even need to sell their home or car in order to stay afloat or be able to make their proposal payments on time.
Also, student loan debt cannot be included in a consumer proposal. While a proposal can stop you from having to make your student loan payments, interest will still be accrued. This could potentially leave you with even more student debt than you began with, so it is important to be very careful.
If you are still confused about whether the debt you have can be included or not, be sure to reach out to an expert in your area. They will be able to look at the exact kinds of debt you have and see what can be included and what cannot be.
The Right Consumer Proposal For Your Needs
If you feel a consumer proposal in Brampton is the answer to your problems, or you just want to learn more about them, don’t hesitate to reach out to Loans Canada. We are confident that we can help you out and answer any questions you may have.