Settling debt vs Bankruptcy
April 6th, 2007 by Questions
Certain websites that I have been browsing suggest that once the debt goes to a collection agent it may be better to offer to settle the debt for a low percentage threatening them that bankruptcy may get them even less rather than actually going through with a consumer proposal or bankruptcy.
Example: You have 50K in debt , 30K salary a year , you have a dependant and about 15K in non-exempt assets. You offer to settle the debt for 20K. If you declare bankruptcy the creditor gets 15K minus the trustee fee plus whatever surplus they get over 9 months.
What is a trustee’s take on that? It does sound a bad idea to me as it doesn’t offer any real legal protection against the creditors