I recently met with a young couple in my Toronto office who were struggling with debt and having a hard time planning for their future together. Initially, I spoke with the wife and she told me that she was the only one having financial trouble but she would bring her husband to our meeting for moral support.
At the meeting, we reviewed her financial situation and it was clear that even though most of the household credit cards were originally in her name, there were extra cards issued to her spouse and he had used the cards. She brought in her credit card statements and his name appeared after her name on almost every bill and where his name did not appear on the statement I suggested they call the lenders to verify if he were also a cardholder and responsible for the debts.
Since I knew that we were discussing debt for both husband and wife, we reviewed all of the options for them as individuals, and as a couple. In total they had about $56,000 in debt and $38,000 of that was debt they were both responsible for together. As a young married couple with a future to plan for, they really wanted to get the debts behind them before starting a family. They also wanted to be sure that whichever option they chose, it would not prevent them from owning a house some day.
They liked the idea of a consumer proposal – together – and I let them know that I have met other couples in similar financial situations who were able to purchase a house towards the end of their consumer proposal, but that purchasing a home while in a proposal would likely require a bigger down payment. It made the most sense to them do this together so that they would have one easy monthly payment. As a family with two incomes, they could afford to make a proposal, or deal with all of their creditors, and the monthly proposal payment worked out to be $400.00 – an amount that was significantly less then what they were paying to juggle all of the debts on their own.
We signed the proposal paperwork together and all of the creditors were given a chance to vote on the deal, and the creditors asked that the monthly payment be increased to $425.00 to which the couple agreed. The consumer proposal was a success and the phone calls stopped, they are well on their way to financial stability, home ownership and starting a family together.
To find out more about filing a consumer proposal in Toronto please contact us at 310-PLAN (310-7526), or e-mail us, to learn more about your options. Don’t lose hope, and don’t let debt stand in the way of planning for your dreams!
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