Now that my consumer proposal has been accepted by my creditors, what do I do?
Now that your proposal has been accepted, all that you need to do is continue to make your payments and complete both counseling sessions. We recommend being set up on pre-authorized payments and that way, you do not have to worry about dropping off your payments during business hours. If you are interested in completing your proposal more quickly, you may choose to set up your payments for weekly or biweekly withdrawals which result in extra payments being made each year. This is a great way to get ahead or simply a way to ensure if an emergency arises, you do not fall behind in your payments.
Can I pay my consumer proposal off early?
After your proposal has been accepted by your creditors, you may pay off your proposal at any time. We can set up a lump sum payment through pre-authorized payments or you can send in a cheque or money order. However, you must complete both counseling sessions before we can issue your Certificate of Full Performance.
Are there any penalties for paying it off early?
There are no penalties for paying your proposal off early; it will actually speed up the process of rebuilding your credit. Once a consumer proposal has been completed, it will remain on your credit report for three years from the date of completion.
Are there any discounts for paying it off early?
No, the terms of your proposal remain as filed with the Office of the Superintendent of Bankruptcy. The only circumstance where your terms may change is if you were to file an amendment to your proposal and it was accepted by your creditors.
How can I make a change to my payments?
Should you need to make a change to your payments due to an emergency or require a payment to be held, we ask that you call head office at 1-800-472-7775 ext 6000 and speak with one of the staff members in the proposal department. Please note that should you need to hold a payment to a different day, payments are processed at 9:00 a.m. and therefore you would be required to let us know prior to that time.
Can I borrow for a house or car?
You may apply for a mortgage or a car loan however it will be up to the institution whether or not to grant the funding to you. You must disclose that you are currently in a consumer proposal.
Can I sell my house or car, or cash in my RRSPs?
Once your proposal is accepted by the creditors, you are in control of your assets, so yes, you can sell your car or house, or cash in your RRSPs. However, here are some points to remember:
- If you cash in an RRSP you are liable for the taxes owing when you file your taxes next year. The bank may only withhold 5% or 10% of the amount you withdraw, but if you are in, say, the 30% tax bracket, you will owe the remaining amount when you file your taxes next year, so we strongly recommend that you set aside enough to pay your taxes if you cash in your RRSP.
- If you sell your house, you are responsible for paying the outstanding mortgage, property taxes, and any other registered liens or encumbrances. If there is “negative equity” in your house, meaning you sell your house for less than the amount required to pay the mortgage, real estate fees, legal fees, and other outstanding amounts, you are responsible for the shortfall (unless you surrendered the house prior to filing your proposal). Please contact our office if you have any questions.
- You may sell your car, but as with the house example above, if you owe more against your car than it’s worth, you are responsible for the shortfall, unless you surrendered the car prior to filing your proposal.
I have lost my job (or circumstances have changed); what can I do?
The best thing to do if your circumstances have changed and you are having a hard time making your payments is to call our office and book a meeting to meet with your Trustee to discuss what options are available to you. If you are a month or two ahead on your payments, you could defer payments for a month or two until you are working again. It’s important to remember that if you fall three months behind on your payments your proposal is automatically annulled, so we strongly recommend that you call our office before you get behind, so we can explore different options to get you back on track.