Mortgage Renewal after a Consumer Proposal
My husband lost his job last May (automotive industry) while I was on maternity leave. we`ve fallen behind on our credit card payments and 5 of them were sent to collections. We`ve since paid 2 off and our credit rating is poor. Banks are not willing to give us any loans due to the bad credit and we don`t have enough equity to get a 2nd mortgage on our home. A few people have suggested that we do consumer proposal. Our total unsecured debt is $43000.00
What would happen if we decide to do consumer proposal in terms of credit rating? Will we have a hard time when the time comes to re-new our mortgage in 4 years time?
Posted from: Ontario
If you are already in collections then filing a consumer proposal won’t look any worse on your credit report then things already look… Debts in collections are reported as an R9 and a consumer proposal is supposed to be reported as an R7. I say supposed to be reported because not all creditors bother to report the proposal to the reporting agencies.
In regards to your mortgage, as long as you don'[t have any payment issues during the proposal you shold not have any problems renewing your mortgage in 4 years. You won’t be able to switch mortgage companies, but unless something else happens you shouldn’t have any problems renewing with the mortgage company you are with.