Many individuals are finding they have significant equity in their home but are carrying a high debt load. Due to their low-income level and/or poor credit rating they are unable to refinance their home to obtain a secured loan (mortgage) to consolidate unsecured debts such as outstanding income taxes, payday loans and credit cards balances which are subject to high interest rates and possible collection actions.
If these concerns apply to you, one option available is to consider filing a consumer proposal. A consumer proposal will stop interest and penalties from accruing on debts and will allow for a single monthly payment, based on your ability to pay. Payments can be made over a period of time up to five years. Often the consumer proposal’s monthly payment is far lower than what you are currently paying on these debts.
A consumer proposal can also help you rebuild your credit rating as it is open to early repayment at any time without penalty. Equifax reports that your credit rating begins to improve six years from the filing of the consumer proposal or three years following completion, whichever is sooner.
Contact Kunjar Sharma & Associates Inc., Licensed Insolvency Trustee for a free consultation to learn more about home equity and consumer proposals.
Kunjar Sharma & Associates Inc. also provides Corporate Proposal services to help businesses with high debts.
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