This is the most common type of payment. Over a maximum period of five years (60 months), the agreed amount is paid off in monthly installments. For example, if your combined renegotiated debt load was $20,000 and you chose to take the full five years, you would pay $366 each month. If you wanted to pay it off in two years, you’d need to pay $833 a month.
Lump Sum Payment:
Perhaps you have savings or sellable assets that could be used to pay off all the debts covered under the consumer proposal at once. The advantage to this is that your credit score recovers more quickly and that you do not have the stress of monthly payments. On the other hand, if unhealthy financial habits have brought you to the point of needing a consumer proposal, it is a good idea to have both a plan and support in place to help you change your money management approach.
You may have the resources to make a lump sum payment at the start of the process and then make monthly payments until the debt is cleared. This approach can shorten the period during which the consumer proposal is noted on your credit history.