What is a consumer proposal? How will my credit score be affected? Can I have credit again after (or during) a consumer proposal? We have answers to your questions.
What is a consumer proposal?
A consumer proposal allows you to negotiate a reduction of your debts to your creditors (regularly between 50 and 70%) and to distribute your payments over several years. Your monthly payment is based on your budget and your personal economic situation.
At Nicecredit, we have many years of insolvency experience and we are able to administer your consumer proposal. As a result, creditors will no longer have to contact you or harass you in order to collect the payments due to them.
How will the consumer proposal affect my credit?
A credit rating R9 means:
- A bad debt, placed in recovery and / or;
- A move without having given a new address, and / or;
- A credit score demonstrating bankruptcy.
If you file a consumer proposal, your credit rating will be at R9, but will change to R7 once you are released. This last credit score will last 3 years after the release of your debts and means that you make regular payments through a special agreement to resolve the situation.
Obtaining new credit after the proposal
A creditor will only allow new credit if you have made efforts to restore your credit, if you have a debt ratio below 40% and a steady income job.
It is highly likely that if you are in debt and you fail to pay your monthly payments diligently, that your credit rating is already affected. If so, your chances of getting new credit from a creditor are already low.
It is therefore important to try to free yourself from your debts as soon as possible. A consumer proposal is a viable solution, despite the fact that your credit rating will remain at R7 three years after the release of your debts. If you do not take care of your financial problems, your credit rating will suffer the consequences for a longer time, because you will continue to have a bad credit as long as your debt is high and you miss payments.
Do you feel choked by the amount of debt you owe to your creditors? At Nicecredit we are able to help you get back on top of your financial problems.