When to file for CP

August 7th, 2013 by Questions

I currently am surrendering my condo back to the bank. I have 2 credit card debts totaling about $58k, and two student loans worth about $7k.

After I stop making the minimum payments on the credit cards, how long should I wait to file for CP? Can I wait till the collection hassling begins, allowing a little time to get things in order?

Posted from: Ontario

Questions

One Response to “When to file for CP”



August 07, 2013 at 6:08 am, A licensed trustee said:

There are two schools of thought as to when you should file a consumer proposal (or bankruptcy). The first is to file as soon as possible to avoid any collection action and the deterioration of your credit profile. The second is to delay as long as possible, discontinuing your minimum payments to free up money for other things. With this strategy you file only when you are being threatened with legal action (wage garnishee).

Both approaches work – it’s really a question of which suits you. based on your comments, I am guessing you’d be fine with delaying as long as possible… Of course you can change your mind at any time and file so this is the strategy we usually recommend to anyone that doesn’t mind the collection calls.

Make sure to find out what your “end of study” date is for the student loans. You need to have been away from school for at least 7 years in order to include the student loans in a consumer proposal.

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