- Free consultation
- Reduce your monthly payments
- Speak with a debt expert
- Stop collection calls
- Take control of your debt
Despite Montreal being one of the cheaper Canadian cities to live in, your expenses can still get ahead of you. Unfortunately, while a bit of debt isn’t the end of the world, a lot of it can cause lasting damage to your finances and credit. When that happens and simple methods of repayment aren’t working, more extreme measures might be necessary to prevent the situation from getting any worse.
One of the more drastic, but helpful debt management products available to consumers in Montreal is the consumer proposal.
A consumer proposal is a legally binding contract that can be struck between you and the creditors you owe outstanding debts to. If your creditors find the proposal acceptable, you’ll have the opportunity to pay back a large portion of what you owe, rather than the full amount. Before you choose this route, however, it’s important to be aware that a consumer proposal can have a significant negative impact on your financial profile.
It’s best not to consider a consumer proposal in Montreal unless:
Once your proposal has been agreed upon, your repayment will be done via a series of monthly installments. The length of your payment schedule will vary depending on your debt amount and the current state of your finances.
However, as we mentioned, only unsecured consumer debt can qualify for the process. Most secured debt, that’s tied to collateral, as well as some forms of government debt will not be eligible. This includes (but isn’t limited to):
If all goes well, your outstanding consumer debt balance should be drastically reduced, hopefully, eliminated altogether. In order to stay on track toward your debt repayment goals, it’s essential to make all your payments on time and in full.
Click here to discover ways of conquering your high-interest consumer debt in 2019.
Although you may now have an idea of what a consumer proposal is, we’ll give you a basic rundown of the actual process so that there will be no confusion on your part.
Although a consumer proposal is an effective way of getting rid your consumer debt, it can also damage your credit.
Here’s what that damage might look like:
While it won’t be impossible to get approved for a loan or other credit product during a consumer proposal, it will certainly be more difficult than for someone who has never gone through the process. That’s because when you apply, your potential lender may check your credit, see your consumer proposal and damaged score, and determine you’re not creditworthy.
Check out some fast ways of rebuilding your credit after a consumer proposal in Montreal.
A consumer proposal, while risky for your finances, is still a better option than declaring personal bankruptcy. Although both solutions involve a similar legally binding payment process, the overall outcome and financial result of each will be significantly different.
Even though it can be difficult to secure new credit during and after the consumer proposal process, the final result of bankruptcy will be far worse, making it next to impossible until you can restore your credit. Only consider bankruptcy when no other debt management product, including a consumer proposal, will help. Speak to a financial advisor to know when bankruptcy is appropriate for you.
Here’s how much it would cost you to file for bankruptcy for the second time in Canada.
If you’re looking for information about consumer proposals in Montreal, don’t forget to reach out to Loans Canada. We’re always here to help you with your debt relief needs. Be sure to contact us today!
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