What Happens After My Consumer Proposal?
Meeting the terms of your consumer proposal will be a wonderful feeling.
With the chance to live free from debt, your income will gain a huge boost, and you won’t have to stress about the money you owe anymore.
You will have worked extremely hard to get to this point, and this means that there is good reason to celebrate, though you have to make sure that you’re aware of the position this leaves you in.
We’re going to take a look at what you can expect to happen once you’ve met the terms of your consumer proposal.
Need Help Reviewing Your Financial Situation?
Contact a Licensed Trustee for a Free Debt Relief Evaluation
What Happens At The End Of A Consumer Proposal Process?
The process of filing a consumer proposal will end once you’ve met the obligations outlined in the agreements you’ve made with your creditors.
This will mean clearing your debt, covering a portion of the interest you owe, and doing it all in a timely manner that reflects your agreement.
You will receive a document called a Certificate of Full Performance that can act as proof that you’ve successfully completed this process.
While you will reach the end of your consumer proposal once you’ve met your obligations, your Licensed Insolvency Trustee is going to have some further work to do before they are released from their side of this arrangement.
Your trustee will compile an accounting of all of the money that has been paid, review any claims made by your creditors, and pay off the final payments on your behalf.
Here at Bankruptcy Canada, we pride ourselves on providing rapid closure once you reach this point.
How Will Your Consumer Proposal Impact Future Credit?
While reaching the end of your consumer proposal will be a good feeling, it’s crucial that you take the time to think about how this could impact your future credit applications.
Your consumer proposal doesn’t leave you with an entirely clean slate, and creditors will be able to tell that you’ve gone through this process when you make future applications.
Of course, though, the way that this can impact your credit can vary depending on the situation.
Your Credit Report
Your credit report will show that you’ve gone through the process of a consumer proposal for as many as 3 years after you’ve completed it.
This means that you will have no choice but to disclose this to lenders for this period, and this could certainly impact your ability to apply for loans.
Thankfully, your consumer proposal won’t impact the credit score itself, and you can start to work on improving this side of your finances as soon as the consumer proposal is done.
While it isn’t all the common, mistakes can be found on credit reports, and this means that you have to be proactive in monitoring this side of your finances.
You can perform a Credit Investigation Request if you find something wrong with your report, and this will enable you to have the information checked and changed if it is found to be incorrect.
Both Equifax and TransUnion of Canada can provide your details about your credit report, and it can be worth getting it from both of them to make sure that they are the same.
Applying For Future Credit
Applying for credit after you’ve been through the process of filing a consumer proposal is a tricky decision.
Having just spent a long time working to clear your debt, getting into more of it will feel like a massive step backwards, and could easily leave you in a position similar to the one you were in in the past.
Of course, though, life is often unpredictable, and there could come a time when you need to take out another loan to cover unavoidable costs.
If you do this very soon after exiting the consumer proposal process, you will almost certainly lack a good enough credit score to get the best interest rates, and this is something to keep in mind if you aren’t absolutely desperate to borrow.
Let’s take a look at how different types of loans can work as your consumer proposal draws to a close.
It’s extremely hard to cover the costs of buying a home without a mortgage.
Unfortunately, though, you will usually have to wait until around two years after coming to the end of your consumer proposal before you can get a mortgage with good interest rates.
Many mortgage providers will be happy for you to renew your mortgage when you’re still going through your consumer proposal, as long as you’ve kept up to date with payments in the past.
Much like a loan, you will usually have to wait for around a year or two before you will be able to get a car loan from a mainstream lender.
There are loan specialists out there that can help with this, though the loans they offer can be extremely expensive.
Credit cards are far more relaxed than other types of loans, and you will often be able to apply for and receive a new credit card before your consumer proposal is finished.
Of course, though, this will be very risky and could cause you greater financial problems down the line.
We’re always happy to discuss credit card alternatives with our clients.
Getting Help With Your Consumer Proposal
Here at Bankruptcy Canada, we’ve had the opportunity to work with countless clients over the last couple of decades.
This has given us a unique insight into the consumer proposal process, and we’re very well-equipped to provide advice and support as you go through it.
Of course, though, alongside this, we can also help you to maintain control over your finances once you reach the end of this process.
You can get in contact with our friendly team by giving us a call at 1-877-879-4770 or sending an email to Gordon@BankruptcyCanada.com, and we’ll work hard to provide confidential and obligation-free advice that will help you to start working on your finances in no time.
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