Consumer Proposal Case Story
Debt can be a tricky thing to wrap our head around.
Those of us who don’t relate well to figures and statistics may find it difficult to visualise the effects and consequences of their debt.
Often we fall into bad habits or take on more debt than we can manage because we don’t really know what we’re getting into.
And the often confusing language of consumer finance does little to help the situation.
Often we find it easier to learn from stories and parables.
After all, we’ve been making sense of the world around us through stories since the dawn of time.
By looking at the stories and examples of others, we can better understand our own circumstances, and the options available to us.
The following is based on a true story…
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Meet Jane & Joanne
Jane & Joanne are two sisters.
Their names have been changed to protect their anonymity, but the following story is based on their real life experiences.
Both these sisters had a similar debt problem, but the two took very different paths in dealing with their problem, and as such were faced with very different results.
Jane and Joanne decided to open a retail business.
Their business got off to a flying start, and they quickly earned a number of loyal customers.
However, as the years went by, they found that their sales were starting to decline. 10 years after setting up shop, Jane and Jo were starting to panic.
The debt trap
Sales were starting to dwindle, but the overhead costs of running their business kept on coming.
To make up the shortfall between their income and expenditure, like all-too-many business owners, the sisters found themselves using personal credit cards to pay their business expenses.
Once the store became profitable again, they told themselves, they’d be able to repay their debts and get their finances back on track.
Sadly, the slow business continued for two more years.
After realising that things were not going to improve, the sisters reluctantly closed their business.
Their darkest hour
In every story worth telling, there comes a point where our heroes reach their darkest hour.
And this was certainly Jane and Joanne’s.
They were left with no means of income and around $40,000 in credit card debts apiece.
Both owned their own homes and were married to people who had a good income.
However, they were very worried about how their debts would impact their households.
Would they lose their assets?
Would they be able to pay down their debts with just one income?
Upon seeking advice, a Consumer Proposal was recommended.
This would ensure that their homes were protected and allow them to reduce the principal to be repaid, as well as freezing any interest, charges and fees.
What Jane and Joanne did
The majority of her creditors agreed that she could pay $300 per month, for five years.
Her Trustee had looked over her household finances carefully and they both agreed that this was a figure that she could keep to.
What’s more, when Joanne found work again, she was able to pay off her Consumer proposal earlier by increasing her payments.
As a result, she had completed her Consumer Proposal in just over 3 years.
5 years after first submitting her proposal, she was debt-free, happy, free of stress and on her way to rebuilding her credit rating.
Jane, however, decided not to file, as she was worried about the long term effects of a Consumer Proposal on her credit rating.
She had always paid her bills on time, and her credit rating was in good standing.
Understandably, she didn’t want to jeopardise that.
However, despite her good credit rating, she was turned down for a Consolidation Loan by her bank because although her credit rating was good, she had too much debt.
As a result, it became harder and harder to manage her credit card debts and their various interest rates.
Jane wasn’t able to pay more than the minimum repayments on her credit card debts, meaning that it would take her 20 years to repay her debts in full.
After 2 years, she was devastated to learn just how little of her principal had been repaid and how much she’d thrown away on interest.
Eventually, Jane changed her mind and decided to file a Consumer Proposal, agreeing to pay $275 per month for 5 years.
She dug herself out of the hole in the end, but she was significantly behind her sister when it came to liberating herself from her debts.
The moral of the story
The moral of the story is that the decisions you make in terms of debt relief can have an enormous impact on your ability to live free of debt.
If you’re worried about becoming like Joanne and want to be more like Jane, get in touch with is today on (877)879-4770.
We can help you to find the right debt relief solution for your circumstances, allowing you to escape your debts earlier and live debt-free faster!
Information on Consumer Proposals
Consumer Proposals in Canada – An Alternative to Bankruptcy
What is a Consumer Proposal?
What are the Benefits of a Consumer Proposal?
What are the Steps in a Proposal?
What Debts Are Erased in a Consumer Proposal?
Is There Life After a Proposal?
Consumer Proposal Eligibility
How to Amend a Consumer Proposal