The question most asked is “Will we lose our house?”. Recently, a couple contacted us after realizing that they were barely able to make the minimum payments on the debts owed now that there was only one income (after the loss of a job) coming into the household. They were devotedly religious and had enrolled their three children into private school that offered religious teachings in their faith. The expensive costs of the school meant that they relied on credit cards and lines of credit to meet some of their living expenses and the monthly charges had been adding up and they were close to the maximum credit limits.
They feared taking any steps that would jeopardize their home, but the increasing stress of the situation was making it difficult to not investigate alternatives. Our first meeting was a tough one – we explained the process of a Consumer Proposal, where a person can keep their assets and work out a repayment to the creditors, without interest, at usually much less than what is owed. But the offer had to show that they could afford to make a monthly payment to creditors.
The expenses of the private school were just too much for them to handle, as they also had to pay their regular monthly mortgage, living expenses, AND a consumer proposal payment. Something was going to have to change to balance the budget.
They considered their alternatives. They practiced their faith daily at home; the children would be getting that exposure as well as the deep connections with their congregation. Their solution was to put their children into public school, which allowed them to meet their regular monthly living expenses, without relying on credit to make up the shortfall. It also meant there was money left over to offer a proposal to creditors! They kept their home and felt enormous relief and a huge reduction in stress, enabling them to get on with their lives in a better emotional and financial state.
Many people assume that they will lose their home if they do a consumer proposal. This simply isn’t true, but it’s a common assumption that prevents many people from seeking help with their debts, and ultimately getting on with their life.