We offer two main services: a consumer proposal, which is a formal debt settlement, and bankruptcy.
Consumer Proposal and Credit Rating Penalties
Filing a consumer proposal, which stops interest, prevents creditor action and compromises debt, results in a R7 (bad) credit rating. This would stay on your credit bureau report for three years after your proposal is paid in full.
Some consumer proposals:
are paid in one lump-sum
can last up to 5 years
Filing a consumer proposal could affect your credit rating for 3-8 years.
Personal Bankruptcy and Credit Rating Penalties
Filing personal bankruptcy results in a R9 (worst) credit rating. As a first-time bankrupt, it would remain on your credit bureau report for 6 years after you receive your discharge from bankruptcy.
Discharge means the completion of the bankruptcy process, which for a first-time bankrupt would be 9 or 21 months.
How does one maintain a good credit rating?
The only way to maintain a good credit rating is to pay 100% of your debt in the normal course of business. If you miss payments, or can’t afford the minimum payments then your credit rating will be damaged. Remember, your credit rating is like a report card.
Any debt settlement will have a negative effect on your credit rating.
The thing I always tell people who are struggling with debt is your credit rating can be rebuilt.
Even if you file a consumer proposal or personal bankruptcy to deal with your debt you can rebuild your credit rating. Here’s how.
Getting a fresh start from personal debt means a new beginning.
Contact us for a free consultation – we have offices across South Western Ontario with flexible hours to meet your needs.
