The business of Elise’s employer, 35, has been hit hard by the pandemic. So much so that he had to lay off his staff, first temporarily for a few months, then permanently at the beginning of last year.
With low incomes and no financial cushion, Elise has to turn to credit to balance her budget. In the end, she ended up with $5,000 owed balances on her personal loan and $10,000 on her credit cards. In addition to this is a student loan of $10,000 for studies completed 10 years ago.
unable to pay
At first the young woman was depressed and depressed by her situation, then rolled up her sleeves and showed herself bent on getting out of this bad situation. Hence, she is actively looking for a new job and is applying for a debt consolidation loan from her financial institution. But during successive confinement periods in 2020 and 2021, jobs weren’t plentiful in their field, catering.
Moreover, his lack of financial stability hardly reassures his bank, which rejects the loan application. The latter would have accepted on the condition that one of the signatories was included in the agreement.
Remember that the co-signer becomes a guarantor of the debt in the same way as the borrower, and it is a heavy responsibility that no one around Élise is willing to take on. In a dead end, she decided to consult insolvency professionals in order to take measures that would allow her to restore her long-term financial balance.
“During the first meeting, we executed the asset and liability balance sheet, and prepared the balance sheet,” explains Sarah-Maude Daviau, financial recovery advisor at Raymond Chabot.
Very quickly, it turned out that due to the high minimum monthly payments on her debts, the young woman would not be able to meet her obligations, if not only aggravate her situation. To raise the bar, there are only two solutions left: consumer proposal and bankruptcy.
“Elise wanted to avoid bankruptcy at all costs, so she preferred to choose the consumer offer. This would allow him to make one monthly payment over 60 months in order to pay off a good percentage of his debts. If she finds a job in the meantime and her income increases, she will have the possibility of paying higher monthly installments than order payment more quickly,” says Sarah Maud Daviau.
Back to the right track
His personal loan and credit cards as well as his student loan can be included in the consumer offer.
In fact, she finished her studies more than seven years ago, which is a strict deadline for forgiveness of this type of debt in the context of an offer or bankruptcy. Be careful, warns Sarah-Maude Daviau, the counter resets every time you sign up for another workout. Then the end date of the last studies prevails.
“With consumer view, Elise’s credit profile will be affected. But by adopting sound financial habits, you will be able to gradually rebuild them,” concludes the advisor.
Origins:Paid car worth approx. 2000 dollars
Debt consumption :
- Credit card : $10,000
- personal loan : 5000 dollars
- Student loan: $10,000
Total debt: $25,000
Monthly income : Canada’s Emergency Response Advantage 2000 dollars raw
Monthly expenses: 2035 dollars (Including rent, telephone, electricity, insurance, groceries, licensing and registration, gasoline, etc.)
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