How to Stop CRA Garnishment After Receiving an RTP Demand Payment Letter

Ever felt the stress of unexpected financial setbacks? How to stop CRA garnishment is a question many Canadians face when dealing with debt issues and a RTP (Requirement To Pay) from the Government of Canada. Understanding the steps to halt this process can alleviate a significant amount of stress and help you regain control over […]

How Many Times Can You Do A Consumer Proposal

Ever felt like you’re stuck in a financial maze with no exit in sight? Debt can weigh you down, making every day feel like an uphill battle. But what if there’s a way to reset and start fresh? How many times can you do a consumer proposal? The straightforward answer is that you can file […]

Who Can Put a Lien on Your House in Canada?

Liens can significantly impact property ownership in Canada, often catching homeowners off guard. Understanding liens—what they are, the types that exist, and who can place them on your property—is crucial for any homeowner. This article unpacks the complexities of liens, explores potential lien holders, and discusses the consequences they can have on property sales. It […]

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LOC, Overdraft, Secured LOC

If a person has $40K in a locked-in RRSP and makes a consumer proposal, can they then access a secured LOC using the $40 K from the locked-in RRSP to secure the LOC? Can they get overdraft protection on their checking account? Cab they get a personal LOC? Is there a mechanism whereby they can sell the $40K RRSP to gain some capital into a savings account, in lieu of a LOC?

Posted from: Ontario

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One Response to “LOC, Overdraft, Secured LOC”

A licensed trustee said...

I think you may be missing the point of filing a consumer proposal. The goal is to allow you to deal with your debts in a more reasonable manner, as an alternative to bankruptcy. While there is no prohibition against anyone granting you new credit after you file, the reality is that you are unlikely to be approved for any type of unsecured debt until aftre the proposal has been completed.

Secured debt is possible, but by law RRSPs canot be used as collateral for any type of loan. You will need to find something else to use as collateral and even then, a co-signer may be required to obtain a reasonable interest rate.

All of Canada’s insolvency laws were put in place to allow people to obtain releif from their debts – they have not been designed to allow you to immediately get back into debt…. sort of defeats the purpose, don’t you think?