Bankruptcy then Proposal
Is it possible to start a bankruptcy and then part way through cancel and do a proposal. I ask because of home equity. My trustee is willing to use Property Assessement Value, but as per a previous post I am scared that a creditor would say that houses are selling for much higher than the assessment. I was wondering if this were to happen, could I have the bankruptcy cancelled and begin a Consumer Proposal. Thanks for your input.
I think I responsed to your first posting – I’ve got to tell you that you are causing me some concern.
If you think the houses in your area are selling for more than the assessed value then you (and your trustee) are playing a very dangerous game. If caught – you are the person that will lose.
It is possible to change from a bankruptcy to a proposal – it is not very common, but we do it two or three times a year in our own practice.
The problem is you will have lost some credibility. Bankruptcy law was created (in part) to allow the “honest. but unfortunate debtor a fresh start”. How honest are you being if you start out by understating the value of your home?
A better plan is to use a realistic value for your home right from the start and try the proposal first. If your creditors say no, then you can file bankruptcy.
I think you should consider speaking to another local trustee – I am concerned about the direction you seem to be heading.