A consumer proposal is an agreement between creditors and the debtor to consolidate loans into a payment plan that lasts five years or less--usually resulting in repaying less than what the debtor owed. It is possible to get credit after a consumer proposal.
Time Frame
Consumer proposals harm your credit rating a little less than a bankruptcy. Also, they only stay on your credit report for three years. After this three years, creditors will never know you had to negotiate a proposal, according to the Bankruptcy Canada website.
Considerations
Creditors may take a chance on you after completing a consumer proposal because you have no unsecured debt obligations. If you have started building a good credit rating, you are in better position to obtain credit.
Expert Insight
Bankruptcy Canada recommends opening a separate bank account and depositing at least 5 percent of each paycheck. You can secure a loan, using these savings as collateral and to prove you are responsible.
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