FREQUENTLY ASKED QUESTIONS
DO I GET TO KEEP ANY CREDIT CARDS?
This largely depends on the type of restructuring used. If you file a Bankruptcy, then you cannot obtain or have any credit during this process. In other restructuring options, you can keep the credit card if it has a zero balance.
WHAT IS DEBT RESTRUCTURING?
Making the decision to restructure can be a difficult one for some people and it is important to understand both the benefits and implications of doing so.
Different restructuring options have different effects on your credit rating. As a general rule, any time you settle your debts at less than 100 cents on the dollar or you do not pay back the debts on the original terms and conditions, it will have a negative effect on your credit rating. 4 Pillars has one of the most comprehensive credit rebuilding programs in Canada, to help you minimize the impact of debt restructuring on your credit rating. In saying that, let’s remember, the goal is to become debt free and have better cash flow from month to month instead of burning your hard earned money paying interest.
WILL DEBT RESTRUCTURING AFFECT MY CREDIT RATING?
Different restructuring options have different effects on your credit rating. As a general rule, any time you settle your debts at less than 100 cents on the dollar, it will have a negative effect on your credit rating. 4 Pillars has one of the most comprehensive credit rebuilding programs in Canada, to help you minimize the impact of debt restructuring on your credit rating.
WHO CAN BENEFIT FROM USING CHRIS GREW & THE 4 PILLARS TEAM?
Chris Grew helps people throughout Southern Vancouver Island who are struggling with their debt.
We help families and individuals who have at least $10,000 in unsecured debt who want to relieve the stress and uncertainty of their high debt levels and are motivated to take control of their debt. 4Pillars can create a repayment plan at zero percent interest. If you have $10,000 in unsecured debt or more, you may be in a position for a debt restructuring plan. Contact Chris Grew in Victoria and discuss what the best options will be for your situation.
IS DEBT RESTRUCTURING AN OPTION WITH A LIMITED INCOME?
Yes. A Consumer Proposal is structured more on what you can afford to pay, rather than how much you owe.
WHY DOES 4 PILLARS CHARGE A FEE? CREDIT COUNSELLORS DO NOT.
This is not true. The Credit Counselling Society of Canada charges ‘administration fees’ that are added on to your monthly payments. These are usually $75/mo. When calculated over the repayment term of 60 months, this adds up to a total of $4500! In addition, you will repay 100% of your original debt.
4Pillars fees are based on how much we can save you and the complexity or your file. As we represent you and not your creditors, we are motivated to reduce your debt as much as possible. Our clients often have their Proposal accepted between 20 to 25 cents on the dollar.
At 4Pillars, in Victoria, Chris Grew and his team work exclusively for you. Credit counsellors work for and are mostly funded by the financial community. This means they are working for your creditors and are motivated to collect as much as possible. Usually, 100% of the original debt.
WHAT TYPES OF DEBT CAN 4 PILLARS HELP WITH?
At 4 Pillars in Victoria, Chris Grew and his team can help you with many kinds of debt – particularly Credit Card Debt, Personal Loans, Lines of Credit, Leases, tax debt, student loans, debt in collection, etc. We can also go over the differences between secured and unsecured debt.
I HAVE GOOD CREDIT, BUT I AM BARELY KEEPING UP AND LIVING PAYCHEQUE TO PAYCHEQUE. MY DEBTS ARE CRUSHING ME. CAN 4 PILLARS HELP?
If you are in a position of only being able to maintain minimum payments on your debt, you may find that you will be unable to make any headway on the principle balance and find yourself in debt for, in some cases, the rest of your life. (Look at the clause on your credit card statements that lets you know how long it will take to get out of debt if all you are doing is making minimum payments). If you are able to qualify for a consolidation loan, you may be able to restructure this debt without affecting your credit rating. People with good credit are often good candidates for consolidation loans, however, often; the bank may want some form of security if the amount of the loan is large. If this is not an option, there are more aggressive ways of restructuring the debt, but this would affect your credit score in the short term.
CAN I GO DIRECTLY TO A TRUSTEE AND FILE A CONSUMER PROPOSAL? DO I NEED TO WORK WITH 4 PILLARS?
Anyone is free to consult with a Licensed Insolvency Trustee (LIT) without their own representation. It is important to note that the LIT’s represents the Creditors in this process and therefore cannot represent the Debtor. You cannot be the servant of two masters. At 4 Pillars, we work for you, and only you. We want to create a Proposal on a budget that you can realistically complete, and that will set you up for long term financial success. We will also work with you to rebuild your credit for the future.
IS IT POSSIBLE TO RESTRUCTURE MY DEBT WITHOUT AFFECTING MY CREDIT RATING?
If you pay back less than the full amount of any debt, your credit rating will most likely be impacted in the short term. Through working with Chris Grew and the team at 4 Pillars in Victoria, a key part of our program is to help you re-establish a top credit rating so that you can continue to stay on track financially and get a mortgage or reach other financial goals.
WILL CREDITORS OR BANKS SUPPORT A CONSUMER PROPOSAL WHEN IT MEANS THAT THEY DO NOT GET ALL OF THE MONEY THEY ARE OWED?
Between fifteen and twenty thousand Consumer Proposals are filed every month in Canada. Ninety-eight percent of these are accepted when constructed properly. This is where the experts at 4Pillars in Victoria come in. We tailor a repayment program that is based more on what you can afford to pay, rather than what is owed.
HOW ABOUT STUDENT LOANS, CRA, OR OTHER GOVERNMENT DEBT? DOES 4 PILLARS DEAL WITH THAT?
Yes. Income tax debt, GST, Source deductions, Student loans can all be included in a Consumer Proposal. If the Student Loan debt is less than seven years old, it will still be included in the Proposal but will survive the process. We will discuss what options may be available to you. If a Consumer Proposal is your best option, we will arrange to have this filed using the services of a Licenced Insolvency Trustee (LIT).
WILL FILING BANKRUPTCY OR FILING A CONSUMER PROPOSAL PERMANENTLY HARM MY CREDIT RATING?
No. One of the services provided to 4 Pillars clients is our comprehensive credit rebuilding program. We have many partners that assist with credit rebuilding.
Initially, Bankruptcy and Consumer Debt Proposals result in R9 & R7 credit ratings respectively. However, that credit rating is not necessarily attached to you for the long-term. Whether you file a Consumer Proposal or declare Bankruptcy, Chris Grew and the team at 4 Pillars will work with you to come up with a plan to re-establish your credit rating over as little as two years.
I AM KEEPING UP WITH MY PAYMENTS, BUT I CAN’T SEE HOW I WILL EVER GET OUT OF DEBT. CAN YOU HELP?
Many people we speak with are barely keeping up with debt payments but have no realistic way of paying off all of their debt, even in the long term, as interest costs take-up of their monthly payments and very little is applied to the principle balance. These clients may benefit from the relief provided within a Consumer Proposal. This would consolidate their debt into one monthly payment, at zero percent interest. We can discuss the pros and cons of this option and whether this may be a better strategy for you. Consumer Proposals are filing using the services of a LIT..