Embarrassment is a common feeling a lot of people experience when talking about or dealing with their debt. Of course the first step in dealing with this feeling is to make the decision to talk to a professional to get proper advice about the options available.
I recently met with a man, who I’ll call George (but that’s not his real name), who came in to see me for a free initial consultation (all licensed trustees offer free initial consultations). A family member of his filed bankruptcy many years ago, and he didn’t want to feel the same stigma by going bankrupt himself.
George’s income was over the surplus income limit, and he had an RESP, so a bankruptcy would be an expensive solution for him. Instead, he chose to file a consumer proposal; you can read the full details in my post on the advantages of a consumer proposal in Hamilton, but here are the key advantages for George:
- He avoids filing bankruptcy.
- His monthly payments are lower and more affordable. Even though the process may be longer, he has the option of making larger payments to get it paid quicker.
- There is no penalty to him if he works overtime or if he gets a raise. He can even apply to the extra earnings or his tax refund to his proposal payments to get the process done quicker.
- He gets to keep the RESP. The offer in the proposal takes into account the assets so there is no risk of George losing the RESP so he can worry less about being able to provide for his children’s education.
- He can feel good in the fact that he has made an effort to repay his creditors what he could afford.
For George, a consumer proposal was the correct solution.