Consumer Proposal & The Bank

August 8th, 2005 by Questions

We have a little over a year left to complete the payments of a 5yr. proposal. We want to sell our house and downsize. When I approached the bank (that holds our current mortgage) to see if they would “port” it over to the new property, the woman said that because this bank was one of the creditors involved in the proposal, they could ask us to pay off the original debt. I was under the impression that after the proposal was filed, each creditor had 45 days to challenge or sign off. Can they go back on this and demand money owing from the original debt if we want to re-mortgage?
Thank you for any info.


One Response to “Consumer Proposal & The Bank”

, Barton Goth, GCO Inc. Bankruptcy Trustees said:

They can always ask for you to repay a debt, but as long as you successfully fulfull all of your obligations under the proposal you are cleared from the balance of all the debt listed in the proposal and have no legal responsibility to make any further payments to those creditors. Now this will probably sour your relationship with your existing bank as they have taken a loss on those accounts. I would recommend attempting to negotiate with your existing bank, but if they don’t budge try contacting a mortgage broker or competing institution to see if they will be more willing to help.

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