Car lease & cosumer proposal
April 22nd, 2009 by Questions
Hi and thank you for your wonderful, informative site. I was hoping you could provide some insight into my situation.
I have a car lease thru Toyota Credit Canada. Due to a couple of accidents I was involved in, my insurance has been cancelled eff. May 15th, and my only option thru Facility would cost $10,630/yr or ~$885/mo. Even if I made an effort to afford the monthly payments, I would have to finance one year`s worth of premium and due to my credit score and current debt level, I could only qualify for high rates. I`ve had no luck transferring my lease to someone and Toyota wants to charge me $6500 to exit my lease (there`s 13K left on the lease.) I`m not in a position to pay the $6.5K. I am considering simply taking the car back to the dealer, but I know this will have a negative effect on my credit. Any idea for how long? Since I need a car for my business, I was simply considering getting a rental car and paying for it and the insurance w/ my CC.
However, if I were to file for a consumer proposal or debt settlement prog, will I still have access to at least one CC?
In addition to the car lease, I have $17500 in unsecured debt on which I`ve been making just minimum payments and getting NOWHERE (debt is in fact increasing due to the high interest rates.)
I have no assets. I have been declined for a debt consolidation loan by RBC.
Since returning the car will negatively affect my credit, which is already bad (638 score) as I`m maxed out on my CCs, and considering my overall debt sit`n, I am considering a consumer proposal or debt settlement program.
1. Just to confirm: I should return the car *before* applying, right?
2. Will I still be able to keep a credit card?
3. Is there any reason why one would choose debt settlement over a consumer proposal? It seems the effect is the same on credit score, but debt settlement would cost more.
Sorry about the long-winded question. I very much appreciate any help.
Posted from: Ontario