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

Reality: You can repair your Credit Rating and Credit Score, whereas money spent on servicing debt is gone forever!

Ironically, people struggling with debt often make considerable effort to pay their bills on time. The result is someone deep in debt with a top-notch credit rating. Those struggling with debt often believe that they can take pride in the fact they’re paying their bills and getting by, hoping to eventually pay off the debt when in reality, they are on a path that often has no end in sight. Someone owing $40,000 is paying anywhere from $800 - $1200 a month, just to service the debt. At that rate, it could take 5 to 25 years to pay the debt. They 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 your credit rating is temporary. (See credit rating above for more detailed explanation). More importantly, 4 Pillars Consultants are experts at helping you repair your credit rating. With a Consumer Proposal, you can start rebuilding 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 your credit rebuilding plan. The good news is, someone who has gone through a Consumer Proposal or Bankruptcy may start fresh; devoting their cash flow to ordinary living expenses, saving for a home, investing in RRSP’s and begin creating wealth for themselves instead of paying off debt.