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Consolidating debt prior to a Consumer Proposal

I have a number of credit cards and lines of credit. I owe about $55k in total. This amount built up steadily over several years.

I would like to make a consumer proposal, but I recently paid off a $10k line of credit at one bank with money I advanced from a card at another bank. I did it to take advantage of a 3.9% offer for transfers for six months offered by the credit card company. The line of credit I paid off was at 7.5% interest. Debt had been building up on the line of credit over the past several years due to decreased income.

Will the bank object if I had a card with them for years owing $0, and then all of a sudden owed them $10k a few months prior to my proposal?

Thanks.

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One Response to “Consolidating debt prior to a Consumer Proposal”

A licensed trustee said...

The bank certainly has the right to complain – whether or not they will is another matter entirely.

Any transaction you enter into in the 3 months before you file a proposal (or bankruptcy) is considered reviewable – that means your trustee has the right to investigate the transaction to determine whether or not it was appropriate.

Use the links to find a local trustee and discuss this issue in greater detail with them – your trustee will know how the banks react in your area.