22 June 2021
Safe, secure & confidential
Key Points
Even though a consumer proposal can reduce the amount that you pay out each month in debt by as much as 80%, you might unexpectedly find yourself in the position of needing to apply for a loan.Â
However, if you have chosen to go down the consumer proposal route, this will make it difficult – but not impossible – to borrow from lenders. This is because, during a consumer proposal, your credit rating will lower to an R7 status, the third lowest rating above asset repossession (R8) and bankruptcy (R9).
Yes, you can, but you may find that your options are extremely limited and the amount of added-on interest will be extremely high. This is because you are seen as a financial risk to potential lenders. In their eyes, if they are going to take a chance on lending you money, they are going to want to be compensated appropriately.
Here are some things you should expect if you apply for a loan while in a consumer proposal:
– Your finances and credit will be assessed.
– You will need to provide evidence of a stable income.
– Your lender will need to be in touch with your LIT or consumer proposal administrator to discuss how responsible you have been with payments to that point.
– You’ll need to work with your trustee to make sure that you don’t take out a loan that isn’t feasible for your budget.
– You will need to show your administrator or trustee and a lender that you are able to manage both loan and consumer proposal payments.
If you can provide evidence that your consumer proposal has made you more responsible with money, then you may be able to get approved for a loan. However, there are a number of pitfalls that you should be aware of that your insolvency trustee can help you to navigate:
There are also a lot of scams out there that target vulnerable borrowers and lead them into a false sense of security in order to steal their financial information. Your trustee can ensure that you don’t let desperation influence your thinking and inadvertently make your situation far worse.Â
You should be cautious about lenders who will approve you easily because a low credit rating can give lenders permission to bump up interest on your loan, making it more expensive as time goes on.
Our licensed insolvency trustees are here to advise you on the best path to a debt-free life that suits you and your needs. If you’re struggling with financial problems, we can help with our range of debt relief services. Contact us today to speak to a member of our team.
Read more
October 24th, 2023
When filing a Consumer Proposal, you propose to pay a portion of the debt that you owe over a specific period of time. One common question that many have is what does a Consumer Proposal look like?
Read more
October 16th, 2023
A consumer proposal will indeed impact your credit rating, but not as severely as a Bankruptcy. While both choices can make it more challenging to secure credit, a Consumer Proposal remains on your record for just three years after your final payment.
Read more
October 13th, 2023
In this article, we’ll discuss how a consumer proposal can influence your current home and mortgage prospects.
Read more
October 12th, 2023
Almost half of all Canadians find themselves with less than $200 to spare by the end of the month, leaving them vulnerable to financial challenges. In today’s uncertain economic climate, unexpected expenses can easily push you into debt, leaving you uncertain about your next steps.
You might be burdened by debt, but you could also have valuable assets you wish to protect. Concerns about the long-term repercussions of bankruptcy may be on your mind. Fortunately, there’s an alternative solution – a Consumer Proposal, which can offer you a fresh financial start.
If you’re grappling with financial stress and struggling with payments, seeking guidance from a Licensed Insolvency Trustee at Harris & Partners is a wise step. They can help you explore options and propose a debt repayment plan to your creditors. Harris & Partners provides expert assistance and complimentary debt counseling to assist you in regaining financial control.
Read more
October 11th, 2023
Immigration and Its Impact on Bankruptcy and Consumer Proposals in Canada Canada is known for its welcoming stance on immigration, […]
Read more
October 10th, 2023
Constant calls from creditors are a sign that your debts are piling up and need to be dealt with. Creditors are required by law to stop collection actions once you file a consumer proposal or bankruptcy. If you have money worries and can’t make payments, it’s in your best interest to meet with your Licensed Insolvency Trustee (previously known as a Trustee in Bankruptcy), at Harris & Partners. This will help you to understand your options and present your creditors with a solution for the payment of your debt. Harris & Partners provides expert advice and free debt counselling to help you begin getting control of your finances.
Read more
October 10th, 2023
Many individuals enter into a business partnership in the hopes that joining forces with another person will create a better client base, bring a more various set of skills to the table, and generally help business boom. Agreeing to a partnership means sharing not only in profits and success, but also in losses and debts. What can you do when your partner declares personal bankruptcy? How does this put you at risk?
Read more
October 10th, 2023
Filing for bankruptcy can be a scary time for anyone. There are many different legal requirements depending on which province you live in, and then there are the questions you’ll have:
Read more
October 10th, 2023
It’s rare to find someone who doesn’t have some form of debt these days, but it’s when that debt gets to the point where you are struggling to pay it that you need to take action.
Read more
October 10th, 2023
Do you have significant tax debts? If the answer is ‘Yes’ or even if you are just concerned with the state of your finances it is beneficial to book a free consultation with a Licensed Insolvency Trustee (previously known as a Trustee in Bankruptcy). When you meet with a Trustee you will need to provide information on your income and expenses, including net monthly take home income and proof of income as well as information about the value of your assets and a list of your debts.
