Reduction in credit card balance
Where do you get the best reduction of your credit cards with a trustee or a credit counselling business? What can you expect your credit cards be reduced to in a consumer proposal? Is there a certain percentage or what does it depend on?
Posted from: Ontario
Most credit counselling services are lucky to get the interest reduced to somewhere between 0% and 5%. So if you are trying to get your principle reduced that is likely not the most effective way. Now a consumer proposal is a different as it is designed as a mechanism to allow you to negotiate with the creditors on more than just interest. Of course it varies based on the specifics of the situation, but right now the average consumer proposal requires you to pay approximately 1/3 of your debts. This depends on your income, expenses, assets and the types of debts you have, but in most cases this 1/3 is pretty close.
As a result I think the consumer proposal is much more effective way to deal with most situations. What I would recommend is that you contact a local trustee (they are the only people in Canada licensed to be able to file a consumer proposal) and they will be able to provide you with more details.