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If you have unsecured debt of under $10,000 and live in the Province of Ontario filing bankruptcy may not be the best option for you. We suggest you contact the Office of the Superintendent of Bankruptcy at 416-973-6441 to discuss your options, or you can visit their website here.

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Bankrupt Proposal & House Equity

I heard a bankrupt person can make a proposal. Is that true. How is it done?

If asked to make a proposal to buy back equity in home so you can keep it, what should be included in your calculations. How do I really know what fair Market Value is.
What does the trustee know that I don’t.

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One Response to “Bankrupt Proposal & House Equity”

Barton Goth, GCO Inc. Bankruptcy Trustees said...

You are correct; in Canada a bankrupt is eligible to file a proposal as long as you have the approval of any inspectors (if present). If the proposal is accepted by your creditors and approved by the court your bankruptcy will then be automatically annulled.

In terms of the necessary calculations, you are required to ensure that your creditors will receive more in the proposal than they would if you filed by bankruptcy. As a result these calculations will look at any surplus payments that would be required in a bankruptcy and any assets with non-exempt equity. As for what the fair market value is, the trustee is not in a position to make this type of a determination, so what would be required to determine the fair market value would be an appraisal from a certified appraiser.