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Will Filing a Consumer Proposal in Ontario Destroy My Credit?

prudent2Okay, you’ve found yourself in a bit of a financial pickle. Monthly bill payments are piling up and you can’t seem to pay each one, on time. Perhaps you are hoping that things will just work out, or maybe you’re realizing that you need a little extra help. Maybe that extra help is a consumer proposal in Ontario, but you’re a little concerned about the impacts to your credit. Read on – we can help clear things up.

Prior to talking about consumer proposal impacts, let’s look at your credit right now. If you are really struggling, you may already have some credit issues.  If you have any bad debt write-offs (R9s), these report for seven years, as do collections. If you’ve made late payments, had too many inquiries for credit, or have maxed out your cards, all of these things will negatively impact your credit.

Ok, so we’ve established that your credit is already less than stellar – and that is ok! It just means you may have to consider the harder options to bring it back up again.

So, will a consumer proposal impact your credit? Yes, but really no worse than where it already sits. It may even be off your credit report sooner – a proposal is off your report 3 years from the date it is paid in full (and you can pay it off at any time). The other positives are that once your proposal is accepted, you have one fixed monthly payment, interest is frozen, and your debt is usually decreased.

Here is the key with a consumer proposal in Ontario and your credit report – try to pay off the proposal as soon as possible. As mentioned, you can pay it off at any time. Once it is off your report, most lenders will extend credit after it has been paid off for two years and you have two years of rebuilt credit.

A consumer proposal in Ontario won’t destroy your credit, but it will have an impact. In the end, it will actually save a great deal of financial stress and help you regain control of your money! You just have to be diligent and make sure that you are working on rebuilding right away.

Want to know more or find out about getting a loan while in a consumer proposal? Prudent Financial will extend a loan when a proposal is paid down by two-thirds! Call us today at 1-888-852-7647.

 

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