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entering into a consumer proposal

I am entering into a consumer proposal… My student loans have not reached the point where they could be included… My consumer proposal is for 48 months… Do I have to keep paying for it when my current interest relief period is up or does it stay inactive until after my proposal is completed? I am concerned because this expense of monthly payments (due to start in January at this point) will make it REALLY hard to keep up with my CP payments. Thank you

Posted from: British Columbia

One Response to “entering into a consumer proposal”

A licensed trustee said...

If you are entering into a proposal these are really questions you should be asking your trustee directly…

While you are in the proposal, the student loans people will assume you want to suspend your payments altogether. I have to warn you that if your student loans do not qualify to be discharged (and you ahve said that your’s don’t) then interest will accrue during the proposal. Now, the student loans may receive some payments from the proposal to offset the interest, but you should assume that when the proposal is done you will owe a little more on your student loans than when you started the proposal.

Here’s the awkward part – if at some point during your 48 month proposal you student loans become old enought to qualify to be discharged (ie you’ve been out of school for 7 years) you have the right to apply to the Court at the end of your proposal to ask that the student loans be included. You’ll have to hire a lawyer or pay your trustee an additional fee to assist you, but you may be able to obtain relief from the student loans later… talk to your trustee…