annul bankruptcy and file a proposal
January 13th, 2009 by Questions
my fiance filed for bankruptcy a few years ago one of his debtors agreed to it while the Canada Student Loans which he had not paid over ten years and should not have been included at all, according to all of the research that I have done. Well this debtor has required him to pay back $16,000.00 before he can be discharged. My question is that if he is already paying can he have the bankruptcy annulled and have him file a proposal? Also how will the other debtor respond? Can they turn around and require him to pay them back as well since it is nolonger a bankruptcy.
Posted from: Ontario
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January 14, 2009 at 9:15 am, A licensed trustee said:
It is certainly possible to file a proposal even after you have filed for bankruptcy and if the proposal is accepted by your creditors then the bankruptcy will be annulled. If the proposal is not accepted you remain bankrupt.
What you need to consider is the relative sizes of the debts involved. For a proposal to be accepted you must have more than 50% of the unsecured debt (in dollars) agree to the terms. If this creditor that is demanding $16,000 is a large creditor then they may simply demand that at least $16,000 be offered in the proposal. In that case you won’t b any further ahead.
You should discuss this strategy with your fiance’s trustee (or a new trustee if that’s what you want to do) – they should be able to tell you if the plan makes sense.