Is Consumer Proposal an option and what has to be surrendered?
My husband and I have a lot of joint debt (and he has some on his own). We have a Van Loan for $45,000, a line of credit for 20,000, a credit card for 19,000 (which we are behind on) and an RV loan. I have a 5000 credit card in my name. He has a truck loan for 75000, a credit card for 8500 and a quad loan for 11,000. We also have a mortgage that is in good standing. In fact, what we are struggling with is the credit cards and line of credit. We both have good jobs and make 150,000/year between the 2 of us. Unfortunately, he lost his job back in March and was unemployed for a month and a half before returning to work at less income. Additionally, his parents were both ill (dad passed away) which required two trips out of province (with the loss of income). These are the reasons we are now struggling with making some of the payments and why the credit cards are high. My question is, will a consumer proposal help us? What will have to be surrendered to make it work? Thanks
A consumer proposal is a great choice for those individuals that have the ability to pay something on a monthly basis towards their debts, but just cannot afford to make the full monthly payments on the debts they have accumulated. Consumer proposals are meant for unsecured creditors. In other words, if you want to keep the house, car, truck, quad and RV then those loan payments would have to be kept up to date. If you find that you cannot afford those payments then you can choose to surrender any of those assets to the creditor and any amount still owing after the creditor disposes the asset will form part of your consumer proposal. Debts included in a consumer proposal would be your credit card debt, line of credit and the shortfall on any of the assets you surrendered.
Without looking at your income and expenses, I can’t advise you on whether keeping your assets and related loan payments is a good idea for your household. While a consumer proposal may not require that you walk away from your assets, before filing a consumer proposal, it is recommended that you meet with an advisor to review your entire budget. If you decide it best to walk away from some of your assets to free up some needed cash flow , this needs to be done at the time of filing your proposal.
I would recommend that you come in for a free consultation to go over your situation in more detail to determine what a consumer proposal would look like for your household.