This week we have discussed the advantages of a consumer proposal. Today we present a real life example, courtesy of Scott Schaefer, CA, Bankruptcy Trustee and Consumer Proposal Administrator in Kitchener, Ontario. You can read the full story in his article on What is a Consumer Proposal? for more information. Here’s the example:
- Joe and Jane (not their real names) were married five years ago,
- They have two children together,
- They purchased their house three years ago,
- Joe works in construction so experiences some seasonal swing in his income,
- Jane works for one of the large insurance companies and has steady income,
- Joe was married once before and pays child support for one child,
- They now have day care costs of $800/month,
- Over the years, Joe and Jane have accumulated debt of $60,000 including lines of credits, credit cards and overdrafts.
After reviewing the options, they offered a consumer proposal that offers $30,000 to their creditors payable through monthly payments of $500 for 60 months. (They did not want to file for personal bankruptcy because they did not want to lose their house or worry about the surplus income trap in a bankruptcy in Canada, and they wanted to pay back as much of their debt as they could).
For Joe and Jane a consumer proposal was the right option. To find out what’s right for you, try our free, 10 second, debt options calculator.