Consumer Proposals – What Do They Cost? Will it Hurt My Credit Rating?

Posted in Consumer Proposals
Posted by J. Douglas Hoyes, CA, CPA, LIT, CIRP, CBV

consumer-proposals-credit-rating-costToday I appeared as a guest on Ask the Experts on 570 News in Kitchener. On the show we discussed consumer proposals.

One of the callers asked the two most common questions we get about consumer proposals.

First, he asked “what does it cost to file a consumer proposal?” I answered by telling him that the cost of a consumer proposal depends on your income, your assets, the size of your family, and your debts. For a consumer proposal to be accepted by your creditors it must offer them more than they would receive in a bankruptcy. For a consumer proposal to make sense for you the monthly payments must be reasonable, so we will often extend the payments for up to five years.

I also commented that the fees that Hoyes Michalos charges in a proposal are set by the federal government; all proposal administrators receive the same fee from a proposal. At our first meeting we will explain the costs in detail.

Second, regarding how a consumer proposal impacts on your credit report, I advised him that according to Equifax, the largest credit reporting agency in Canada, a proposal remains on your credit report for three years after the proposal is completed. However, your ability to borrow again depends not only on your credit report buy also on your ability to save money for a down payment or security deposit, so the best way to rebuild your credit is to save money.

Consumer proposals are a great option for many residents of Ontario who have more debt than they can handle, but don’t want to go bankrupt, so for more information on consumer proposals contact your nearest Hoyes Michalos office.