consumer proposal

I just defaulted on a consumer proposal. And all it does is keep the collectors from phoning you for a while.

But you won't pay off the loan during your term, unless your payments are like $1,000 a month, and if they are, you could have continued your monthly payments, right?

I panicked, to be honest. I didn't know about this forum either at the time; I just had three collection agencies after me for my $60,000 in student loans. A credit counsellor told me (wrongly -- none of them know anything because they are only trained in consumer debt) that I could declare bankruptcy on the loans that were more than 10 years old, so I called BDO Dunwoody, who handles bankruptcy.

And after your term is up, you'll still owe your student loans. They can't be discharged until ten years after you ceased being a full- or part-time post-secondary student. And even then, that's at the discretion of the courts.

Your bankruptcy trustee, as much as they claim to know what's what, have no CLUE about student debt. They sell proposals; that is their business. In fact, my trustee told me that I could ride out the ten year rule by continuing to take out consumer proposals until I could declare bankruptcy on the whole lot. EXCUSE ME? That would have been, for all intents and purposes, FOUR bankruptcies in ten years! If I didn't think I could get credit before, well no WAY would they have given me credit after that!! And I would have been 50!

Where I ran into problems was when I was laid off from my job last January. You see, as you read the posts on this forum, you can't guarantee that you will have a secure job four or five years from now, ...Life really holds no guarantees. I tried to keep up the payments while on EI, but I got behind...my trustee couldn't renegotiate for a longer amortization because the creditors would discover that I was unemployed and all bets would be off.

So I defaulted.

And that is the reality, panthers. I'm so sorry that you had to find out after the fact. But don't beat yourself up. Nobody out there knows anything about our issues; that's why we're here. We all tried to find the answers through "traditional" sources first, and only got in deeper trouble.

You can always hope that the laws will change for the better by the time your proposal is finished. In the meantime, hang with us, read and learn...you'll be better prepared to consider ALL options by then...

Welcome!

Poly

 Panthers,

 A consumer proposal is bankruptcy. It is a program that is governed by the Bankruptcy and Insolvency act, and is administerted only by liscensed bankruptcy administrating groups and individuals, so it is bankruptcy. And ..Big Father is absolutely correct - half the benefit and twice the cost. All the consumer proposal allows you to do is pay installments - and you didn;'t need to do a consumer proposal to do that. I am surprised the bankruptcy administrator who sold you this didn't advise you of these things.

 Just put it this way, you have paid a certian amount already for the proposal fee. The additional fees that the trustee gaffsa from you are 20% of your monthly payment that is set up for you by them. That is right. 20% of EVERYTHING you pay in to the proposal goes in the coffers of that bankruptcy firm.

 As for credit reporting, you will have a derogatory bankruptcy narrative on your credit history for 3 years AFTER you you have successfully completed this proposal.

 May I ask if the trustee advised you that they will be keeping 20% of your monthly remittance fee to them? Sometimes, they try to sugarcoat this and tell people that they colelct a "small fee" from you this way. There is a difference between "small fee" and "20% of evrything you pay in". After 5 years you are back to square one given the predicament you have described.

 Lastly, fixing your credit will be extremely difficult. Youwill have to wait until 2 or 3 years after you finalize the CP. Even then, it is going to be difficult to sell yourself as a low-risk client to a potential lending institution.

 If you need help, let me know. I would love to question the bankruptcy administrator in your case as to why he or she did not offer you advice or the chance to become aware so that you could avoid falling into his program. I am afraid to say that it is only going to band aid a very large wound - and it iwll likely become infected. The bankruptcy trustee does not know how to treat that infection, you see. Come to me if you need help and I will straighted this crap out for you. If the consumer proposal issomething that will cause you further problems down the road, and the trustee failed to properly educate you about these issues, they should be held accountable for making matters even worse for you.

 In all liklihood, the bank wouldn't "come after you" in the event. It is obvious that collection agency interactions may have "scared" you into the hands of the bankruptcy administration. This is what bankruptcy trusatee like, you see. Collection agencies create BIG business for bankruptcy firms.

 Evenif the bank were to come after you, there owuld have to be a good enough reason. I could have easily protected you fromt hat wiothout these extremes.

  so once a consumer proposal is done, im finished with the debt.  It worked out to me paying 48% of the debt.  I know that it screwed my credit, but the collection agency screwed it up already.  From what ive read when something goes into collections, its on your credit for 6 years anyway.  Who is going to lend money out.  Just want to start fresh that all .  Will this do that??

Hi  silence2long , I hope i made the right decision to go with the consumer proposal.  The alternative was to pay 1100.00 per month for 12 years.  And who can pay that?  Its crazy.  I got in a heap of debt because im a pilot.  Now after all said and done there is squat for new jobs for pilots.  The proposal cut my debt in half and if i can make double payments or something then I can get this out of my hair asap!!  The bank wouldn't consolidate, collection agency was on my ass, just had it up to my neck.  I had to give up.  I struggled with this loan for 5 years.  The interest was killing me.  Never really touched the principle. I hate the mess im in.  Just wish i knew before it got out of hand.  This is what i get for an education.  I have a full time job also .  Thanks alot!!!!

panthers,

I know nothing about consumer proposal or bankrupty.....sorry can't advise one way or the other.......like I said it has always been a non-issue for me.

I am in deep........but have found a way to dig my way out of some of it over the years, as far as consumer debt went.  I still have the student loans to go.........and will try to figure that out, too.

If it works for you.........then it works for you.  I just wonder how it will wear on you paying 700 a month for the next 4 years?  If you can manage than good.  Glad you are currently full-time employed.

What happens if you miss a month ???

panthers,

I'm going to take a guess here and say.....if CBCL is calling you... it is already on your credit file.

Just a point to ponder on.........why do you want credit ????

Personally.........I find joy in ripping up all the applications that come in the mail on a weekly basis.  It is a reminder of a place I hope to never be again !!!  I have no want to rebuild the credit..... or to incur anymore..... but that is just me.  I go without a lot of things...... all the time.  I now have a different way of looking at possessions......... I ask myself is it really worth it ??  The answer to that is quite often NO.

But then again I have been poor for the majority of my life......I now know that I can live without credit..........

IS it really that bad too not have credit ????  I find myself in a much better position than friends I have ....that double my income... and have double the debt.  Why?? because they have the credit per say to incur the debt.  I worry for them sometimes...........What if they lost their job???????  Their whole world as they know it would come crashing down, and yes they would be in twice as bad.

Ya Silence, CBCL called me after i missed 2 payments with AMEX (after i had arrangements with amex to make a triple payment)  They screwed my credit up, so now I figure how much worse can i get.  I went 15 years with perfect credit, and it took the pricks at cbcl and amex one second to screw up my whole credit file!!! 

   Johnny, my alternatives were very hard to swallow.  Either way I have to pay $65,000 worth of debt.  Now ive been doing it for 5 years and barely covering the principle.  Ive been threatened by cbcl that they were goin to take me to court, and unfortuantely in manitoba when you go to court, all the documents are accessable via the internet at this site, which includes civial criminal bankruptcys ect. http://www.jus.gov.mb.ca/registry/index.htm   Its to easy for someone to see that youve had problems, and i have a bit of pride.  Boy am I paying for it though.

    A Little trick i used to get CBCL off my ass for a while was i told them my phone number changed and i moved.  Gave them a fake number and never heard from them again.  Just got letters in the mail.  They like to bounce you from one agent to another every 3 months.  You'll get a call saying Hi this is ----- from CBCL special investigations dept.  Full of sh-- .  Ive heard that so many times, and by the way i was making monthly payment of 500.00 to these idiots.  Finally i just said screw it, What are my options.  Bankruptcy or proposal.  Im tired of kissing cbcl's ass so they don't sue me.  Just tired.  You guys are great to talk to, very very informative.  Ive learned alot about the snakes in the collections business, and Johnny , so many times CBCL called telling me to borrow money from where ever (which i learned is illegal) and calling me more than 3 times a day.  I finally gave them my cell phone # that way I could screen it!!  Its pretty sad when your making payments and have to worry when your with your buddies if the vultures will call you.  Very embarassing!!  Thats why I say to them "Govern Yourself accordingly" there famous line to try and make you feel like your doomed!!!