Credit Counselling vs. Consumer Proposal

September 27th, 2009 by Questions

We are looking at the option of credit counselling for our debt problems. With our unsecured debt of approximately $40,000 we feel that is the repayment amount we can afford, about $660 per month. If we went the consumer proposal route our payment would be alot less and much more comfortable, about $200 per month. My question is, why would we choose the credit counselling route if your credit seems to be affected the same way with all the options other than bankruptcy?

Posted from: Ontario

Questions

One Response to “Credit Counselling vs. Consumer Proposal”



September 28, 2009 at 11:03 pm, A licensed trustee said:

Credit counseling is designed for people that can afford to repay their debts in full – they simply need releif from the interest and an easier way to make the paymkents (ie to just one place for all of their debts).

A consumer proposal is designed for people that can only afford to repay a portion of their debts.

If you can afford to repay your debts then you really should not be considering a consumer proposal. Alternatively, if you really can’t afford the credit counseling payment then you shouldn’t be considering that options. Usually when you prepare a monthly budget it becomes fairly obvious whether or not you should be considering credit counselign or a proposal…

As an aside, $200 a month on $40,000 worth of debt sounds “light” for a proposal. If you’ve been dealing with a debt counselor (as opposed to speaking directly to a trustee) be careful – these folks charge a fee and then refer you to a trustee who would have given you the same information without the fee.

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