Question: I have the following unsecured debts in my name and desperately need an answer as I have not missed any payments yet but I will shortly if I don’t get some help fast. My debts include:
$30,000 credit card debt$10,000 credit line through Canadian Tire Bank (it was through an old credit card that I no longer have, but still have the credit line)-the credit card was paid off and de-activated.
$5,000 credit card – I can manage this one
I have secured debt:
$10,000 – this is a truck loan in good standing for a year now.
Can I make a consumer proposal for the $30,000 credit card debt and the $10,000 credit line and keep the $5,000 credit card and the $10,000 truck loan? The trucks value is about $13,000 after being paid off in another 4 years. I rent and I don’t own. I am single and also have one other asset 1 car worth about $2500. My son drives this one but it is in my name. Can I pick and choose what debt to include in my consumer proposal or does it have to all or nothing?
Unsecured Debts Included In Consumer Proposal
A consumer proposal must be made to all unsecured creditors; you cannot pick and choose. You may continue to pay secured creditors (such as car loans) if they agree, but you cannot include one credit card in a consumer proposal and not another credit card.
If you wish to deal with only some of your debts you may consider debt consolidation or debt management. However with a debt consolidation loan or a debt management plan you are required to pay back 100% of what you owe. There are debt settlement companies out there that will propose to settle just one or two debts for your debts however be aware this is very risky. Any informal debt settlement is just that – informal. The creditors can change their mind at any time.
Given your level of debt your best option may be to file a consumer proposal for all of your debts, to give you a fresh start.
If this situation sounds like you and you are outside of Ontario, contact an expert debt advisor for further advice.