Everyone might wonder what’s life after a consumer proposal. Would it be the same life of worrying about paying your debt while the stress has kept you under pressure? Or will it be a much better situation? Let’s find out.
Most Canadians face financial struggles that make them look for different options to help them lighten their debts. Some people seek alternatives to avoid bankruptcy as a last resort. Fortunately, a consumer proposal is there to lift you from your overwhelming debt burdens. It’s a debt solution that you can use to help you with your unique financial situation.
However, having so will affect your credit report and score. That’s why credit repair in Canada is also there to back you up.
Is Consumer Proposal A Good Idea?
The ultimate purpose of filing a consumer proposal is to help you slip out of debt sooner. This proposal happens when you start dealing with your creditors to repay less than you owe. In Canada, it is a government-backed debt settlement program that most Canadians choose for a practical reason.
You can get some of its advantages over a bankruptcy such as holding to your assets, credit rating is less severe than bankruptcy. On the other hand, you’ll also receive a certificate once you attend counseling sessions with a qualified counselor and if you entirely performed the consumer proposal.
What Happens After You Finish The Consumer Proposal?
Life after a consumer proposal is never the same as having the stress of how you’ll pay your remaining debt. Its initial step is to seek freedom from the burden of debts. It will be a binding contract once they voted upon that creditors favor your proposal. In other words, you will reduce your debt through manageable monthly payments.
On the other hand, you can now begin saving more money due to the trim in your payment requirements. However, you can also speed up your consumer proposal as a given advantage. For instance, your financial situation has improved, which could increase your income or have more money coming in. By this, you can pay off your debt faster and become free from debt.
The faster you can pay your proposal, the sooner you can rebuild your credit score. You may opt to open a secured credit card that requires a deposit, and this deposit is your credit limit also.
In short, you can’t spend more than that amount. Importantly, you may use this for the regular purchase of your needs. That way, you can gain points that add value to rebuilding your score.
On the other hand, credit repair in Toronto offers valuable services you can consider to help you rebuild your credit score by removing inaccurate information on your credit report so that the best mortgage interest rates will wave on your action plan.
How Long Does It Take To Recover From A Consumer Proposal?
When you file a consumer proposal because of insolvency, chances are your credit report will affect your score through the reports sent to credit bureaus. There will always be a note that provides the date you file it and when you finish it. This information stays up on your credit report for three years. This time, after the process, you may want to seek assistance in fixing your score.
Can You Make A Second Consumer Proposal?
After a proposal is completed, you’re now debt-free. But, years later, you file another proposal again due to financial distress and tried again to seek an effective plan to pay off the debt.
Even if you win a proposal before, filing a second consumer proposal again for your ongoing debt is still possible. However, the consumer proposal process is still the same as your first.
On the other hand, you can’t file a consumer proposal simultaneously. Note that you have to finish your first proposal before filing your second.
To Sum Up!
Credit score will suffer after a consumer proposal, but this doesn’t mean that your mortgage journey will come to an end or your future loans will be over. After completing it, you still have to take steps to repair your credit in Canada. Allowing yourself to start conditioning the way you spend is one leap to adding value to improving your score.
However, considering some professional assistance will positively impact your mortgage journey. You might want to note that life after a consumer proposal is similar to having peace of mind and pleasure for your wallet.