A Bankruptcy or Consumer Proposal will do permanent harm to your credit rating.

Reality: Your Credit Rating and Credit Score can be repaired, whereas money spent servicing debt is gone forever!

Ironically, people who struggle with debt often expend considerable effort in trying to pay their bills regularly and on time. The result is someone who is deep in debt, but has a top notch credit rating. Those struggling with debt often fall under the impression that despite their debts, they can at least take pride in the fact that they're paying their bills and getting by, and that eventually the debt will be paid off. While it makes sense to want to pay back your creditors, the sad fact is that those attempting to pay their debts month to month are on a path that often has no end in sight for many years - even decades. Someone with debt of $40,000 is paying anywhere from $800 - $1200 a month, just to service the debt. At that rate, the debt won't be paid off for 5 to 25 years (depending on the amount paid each month). All that money put towards paying off large debts bit by bit is money that can never be recovered. The person in debt may have a solid credit rating, but their bank account is emptying at an alarming rate. In other words, the debtor's stellar credit rating is decimating his or her bank account.

A Bankruptcy results in an R9 credit rating. A Consumer Proposal results in an R7. However, in both cases, the downgrade in credit rating does not last forever (see credit rating for more detailed explanation). More importantly, 4 Pillars Consultants are experts at helping individuals repair their credit ratings. In the case of a Consumer Proposal, you can start to repair your credit immediately through various products and options available to you. With Bankruptcy, an individual must first be discharged, but once 'out of bankruptcy' the credit rebuilding process can begin. Credit can often be repaired within 18-24 months of starting the plans. Best of all, someone who has gone through a Consumer Proposal or Bankruptcy may start fresh and devote their cash flow to ordinary living expenses, saving for a home, invest in RRSP's and begin creating wealth for themselves instead of paying off debt.

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