will they force me to declare bankrupt

September 6th, 2013 by Questions

If I file a consumer proposal, will the creditors reject my proposal and force me to declare bankruptcy and sell my house to pay off thr unsecured debt? My credit card debts are around $80,000 and if I sell my house I might get $50,000 after paying the mortgage

Posted from: Alberta

Questions

One Response to “will they force me to declare bankrupt”



September 06, 2013 at 8:52 pm, A licensed trustee said:

If you file a consumer proposal and it is rejected by your creditors you are NOT automatically bankrupt, nor will your creditors force you into filing bankruptcy. Having said that, the reality is, if your proposal is rejected then bankruptcy is likely the only alternative left to you to deal with your debts.

When you file a proposal you need to offer your creditors the greater of these two things (1) the amount they might receive in a bankruptcy, and (2) about 1/3 of what you owe. If you have $50,000 equity in your home then you will need to offer at least $50,000 in your proposal – call it $850 per month for 5 years. If you can’t afford a payment in that range then you may have to sell the house in order to fund the proposal…

Contact a trustee so you can discuss all of your options to deal with your debts.

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