consumer proposal situation

November 16th, 2006 by Questions

I have made a consumer proposal two years ago for approx. $12000. Here is the unique situation:

All of my creditors have NOT filed a claim with my accountant in Manitoba. They have been informed to file 4 – 5 times already by my accountant. There is money waiting to be distributed but no one wants it it seems.
I have now approximately $700 sitting with my accountant.

The accountant has informed me that I must keep my payments continuing until my proposal is finished in five – six months. After my proposal is done, the money that has built up they will send back to me.

Every creditor that has filed has been paid in FULL and my claim is complete.

Why can\’t my file just be done and the money that is owing sent back to me now?
Why do I have to keep on paying this proposal if the end result is a lump sum just being sent back to me?
Is this legal to say that I must continue these payments??
If I default in my payments can anything happen in this situation??
Any other information regarding this situation would be much appreciated

a VERY concerned person

Questions

One Response to “consumer proposal situation”



, Barton Goth, GCO Inc. Bankruptcy Trustees said:

While this is an unusual situation you have nothing to be concerned about. If you look at the proposal, you proposed to make a certain number of payments to your trustee and after you completed your obligations under the proposal you would then be cleared from the total balance of the debts within the proposal. Despite what will happen with the funds, if you fail to make payments as originally contracted you could very well still default on the proposal and still be held responsible for the full face value of your debts.

As for your trustee’s role, he is required to distribute the funds as outlined in the act, and the act says that he must hold onto the funds until your obligations are completed and then distribute the funds. As you mentioned the only way you will have access to any of the monies in the estate is if all the proven creditors are paid in full and this appears to be exactly what you have described.

Additionally, while I don’t know the total length of your proposal, the creditors have the entire duration to prove their claims, and I have seen many times when those claims aren’t proven until well into the proposal period. As it sits you do have the choice whether or not you should continue to make payments on the proposal or not, but the upside to making the proposal payments appears to far outweigh the down.

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