Question: Once it is off my Credit Report, will the individual banks that were involved in the consumer proposal lend me money again in the future? Would I have to repay them back what I still owed to be back “in their good books”? Would the answer be any different if I filed bankruptcy in Canada?

Answer: Once you have completed your consumer proposal, you are free to apply for new credit. It will be up to the individual banks to decide whether or not they will lend you money in the future.

You are correct that one factor they will consider will be the fact that they may not have been repaid in full in your consumer proposal. However, they will also consider other factors, such as your current income, and whether or not you have taken steps to repair and rebuild your credit after bankruptcy.

Your goal should be to pay off your consumer proposal as quickly as possible, and then begin saving money and take steps to re-establish credit.

Question: my husband and i have our personal credit in debt, up to 71K due to a business star up, we’re not trying to get on our feet but our debt just seems to be getting all of our funds and we can’t make payments on time. we’re likely to have $ 300 only after our apt lease, utilities and living essentials, such as gas and food, we own our car. can you tell me what are my options consumer proposal or bankruptcy,how can i pay back, do they reduce my debt fee? Thanks

Answer: In a consumer proposal, a settlement is reached with your creditors. For example, in a proposal you may offer to pay $300 per month for 5 years, or $18,000 in total. If the creditors accept, and you make the payments, the remainder of your debt is eliminated.

If you can’t afford a proposal, or if the creditors don’t accept the offer, the other alternative is personal bankruptcy. The cost of bankruptcy depends on your family income, the size of your family, and certain expenses.

Each situation is different, so we recommend that you contact a Toronto bankruptcy and proposal trustee to review your specific options.

Question: Can a person who recently filed consumer proposal or bankruptcy in Toronto travel out of country on his passport or travel documents like USA on business trips?

Answer: Yes. The filing of a consumer proposal or a personal bankruptcy does not prevent you from being able to travel outside of Canada.

The number of consumer proposals and bankruptcies filed in Toronto increased by 6% in the first six months of 2007, according to statistics just released by the Office of the Superintendent of Bankruptcy. Toronto fared better than the rest of Ontario, where personal insolvency filings increased by 9%.

Most surprising is the increase in consumer proposals, which are fast becoming the leading alternative to bankruptcy in Toronto. Consumer proposals increased by 22% across the GTA. In the first six months of last year 2,275 residents of Toronto filed a consumer proposal. In the first six months of this year that number has increased to 2,768.

A consumer proposal is a legally binding deal we negotiate with your creditors. Instead of going filing for bankruptcy, you make payments over a period of time (no more than five years), usually for less than the full amount you owe. You avoid bankruptcy, and make one monthly payment, and the creditors get more money than if you went bankrupt, so everyone wins.

If you would like more information about consumer proposals or bankruptcy, call our Toronto team at 310-PLAN (310-7526, no area code required) or E-mail us to arrange a free initial consultation. There is help available, so give us a call, and let’s get started.