Professional Tips for Paying off a Consumer Proposal
Okay, so you got yourself into a financial pickle and now you need to find a way to pay off a consumer proposal. You may think that you’re out of luck and options, but the truth is there is still a way to recover. Check out the tips below to learn how to effectively make payments on this financial agreement without ruining your credit score and reports in the process.
Figuring Out Your Finances
First of all, if you have been faced with the problem of paying off your consumer proposal, then you need to start by analyzing how you got here. What exactly is a consumer proposal? Well, it is one of the legal contracts that enables you to bypass filing for bankruptcy. While you are given freedom from debt collectors, you are still obligated to work on paying off your outstanding debts. The reasons for your unpaid loans or expenses will vary; it could be credit card purchases, a mortgage foreclosure, or a combination of poor financial choices. Whatever the case, you are required to work on paying off the debt incrementally, while your credit institution forgives a portion of the sum.
Breaking it Down
So, now that you have the basics, let’s take a look at the nitty-gritty of paying off your consumer proposal. The day you file for this arrangement, you relinquish most of your ability to apply for other loans, while the interest on your existing loan debt is put on hold. Unlike bankruptcy, you will not be at risk for losing your home or property, and most agreements allow for a maximum payment period of five years. If you can’t pay off the debt amount within that time frame, the remaining amount is forgiven. Unfortunately, finding a way to pay off the amount could prove tricky, since many banks refuse loan applicants who have a consumer proposal.
Seeking Alternative Solutions
Even so, you should be aware that there are other options out there. Some financial institutions or credit companies are willing to offer applicants with consumer proposals some alternative methods of paying off their debt. For instance, applicants are encouraged to obtain a second mortgage in order to accumulate some extra income to pay off the amount. Another strategy could be to apply for a personal loan, as accepted by the financial institution. The key is finding a business that won’t turn you down for a loan even with an outstanding consumer proposal.