Finances are a fluid thing subject to change for a variety of reasons—and (despite how it may seem sometimes!) not always for the worse. If you’ve filed a consumer proposal only to find that your financial situation has suddenly improved because of a pay raise, new job, or some kind of “windfall” (i.e. an inheritance, a monetary gift, the sale of an asset, or a lottery win), is there a way you can pay down your consumer proposal early? Absolutely.
You can actually use additional funds to pay down your consumer proposal at any point without penalty — either through extra or increased payments, or via a lump sum payout. In fact, we strongly encourage you to do so if you can. Here’s why:
- Once your creditors have accepted your consumer proposal, they are legally bound by it. This means that even if your income increases (for any reason), they cannot ask for more money or higher payments, nor can they impose a penalty for early payment.
- Once you’re finished paying down your proposal, you’ll have more money in your pocket to put toward your new financially healthy life.
- Your proposal remains on your credit record for three years after you pay it off. The sooner you pay, the sooner it is erased so that you can begin rebuilding your credit rating.
The rules governing consumer proposals allow an early payment in order to help you get back on the road to financial health faster. It makes sense to take advantage of the opportunity whenever possible so that you can begin putting your money to work for you again.
To find out more about how filing a consumer proposal might benefit you, call today for a free, no-obligation consultation with one of our insolvency experts: in Ottawa call 613-237-5555; out of town, call toll-free 1-800-517-9926 or book online.