She loses her footing after her release

Elise’s employer, 35, has had his business badly affected by the pandemic. So much so that he had to lay off his staff, first temporarily for a few months, then permanently early last year.

With reduced income and no financial cushion, Élise has to resort to loans to balance her budget. She ended up owing $5,000 on a personal loan and $10,000 on her credit cards. There is also a $10,000 student loan for a degree that was completed 10 years ago.

Refund not possible

Initially downcast and depressed by her situation, the young woman then rolls up her sleeves and shows her determination to get out of this predicament. She is therefore actively looking for a new job and applies to her financial institution for a rescheduling loan. But during the back-to-back periods of imprisonment in 2020 and 2021, there weren’t a legion of jobs in his field, gastronomy.

Moreover, his lack of financial stability is hardly reassuring to his bank, which refuses his loan application. The latter could have accepted on condition of including a co-signer in the agreement.

Remember that the co-signer becomes as much a guarantor of the debt as the borrower, a heavy responsibility that no one around Élise is willing to shoulder. Starting from an impasse, she therefore decides to turn to insolvency practitioners to take measures that will allow her to regain her long-term financial balance.

“During the first meeting, we did an asset and liability balance sheet and prepared a budget,” explains Sarah-Maude Daviau, Financial Recovery Advisor at Raymond Chabot.

Very quickly it became apparent that the young woman would no longer be able to meet her obligations due to the high monthly minimum repayment of her debts, if her situation would not worsen even further. To raise the bar there are only two solutions left: the consumer proposal and bankruptcy.

“Élise wanted to avoid bankruptcy at all costs, so she preferred the consumer proposal. This allows him to make a single monthly payment over a 60-month period to pay off a good chunk of his debt. In the meantime, if she finds a job and her income increases, she has the opportunity to make higher monthly payments to repay faster,” says Sarah-Maude Daviau.

Back on course

His personal loan, his credit cards, but also his student loan could be included in the consumer proposal.

In fact, she graduated more than seven years ago, a strict deadline for paying off this type of debt related to a filing or bankruptcy. Be careful, warns Sarah-Maude Daviau, the counter resets every time you sign up for another workout. The end date of the last course of study then applies.

“With the consumer proposal, Élise’s credit file will be affected. But if she adopts healthy financial habits, she will be able to gradually build it back up,” the consultant concludes.


Financial assets :Paid car worth approx. $2000

debts of Consumption :

  • Credit card : $10,000
  • Private loan : $5000
  • Student loans : $10,000

TOTAL DEBT: $25,000

Monthly income : Canada Emergency Response Benefit $2000 raw

Monthly expenses: $2035 (incl. rent, telephone, electricity, insurance, groceries, driving license and registration, gas etc.)

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