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Negotiating with creditor prior to Bankruptcy

I owe a total of about 180K to creditors. There is a single creditor to whom I owe 50K. That creditor has offered me a very generous payment plan with a deadline to accept. Can I enter into a payment arrangement with that creditor alone? What will be the impact if later this year I want to file a Division I proposal with the same terms this creditor is offering me? What would be the impact if the proposal fails and turns to automatic bankruptcy?

Posted from: Ontario

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One Response to “Negotiating with creditor prior to Bankruptcy”

A licensed trustee said...

Unless (until) you file a proposal or bankruptcy you have the right to negotiate whatever delas you like with your creditors. If you file a proposal the proposal will supercede those terms (if they are the same then it won’t matter). If you end up in bankruptcy then the deal will be null and void – the bankruptcy rules will supercede any prior arrangements that you’ve made.

There’s nothing wrong with what you are suggesting, but you should probably speak to a professional BEFORE you commit to any repayment program.