Newbie to a CP, some insight to prepare us
Okay - so my wife and I are about to reach out to a counselor and start to discuss a CP. We owe around $100k in debt, it is a result of bad choices trying to be good choices. Most of our loans/Visa's are with CIBC, 98% is owed to them. Our issue is that we continue to wrap consolidation loan into consolidation loan, year after year. I think we are still paying off our original $20k loan now 10 years later 🙂
We have done the same thing with vehicles, our current vehicle has the costs of past vehicles wrapped up in it.
My questions are:
1) Since CIBC is our bank for everything ,savings, chequing, etc...should we move all these accounts to another bank before entering a CP?
2) We have a USD visa, Home Depot and Canadian Tire credit card, neither with anything on it....do they need to be apart of the CP?
3) Stupid as this sounds, would it make sense to try and get a second hand vehicle or something before the CP, our current vehicle is an extra $200/month just because other vehicles are wrapped into it. My brain fart is that we would include the current car in the CP and just pay on the second hand/cheaper vehicle and then after the CP look at getting a new one (if required)
I just don't want to continue down this path, therefore thinking if I can rid myself of the high loan on the vehicle, which I still need one, would it make sense.
1 - Yes open accounts in another bank or credit union. you owe nothing too and will not be a part of the CP. Also change any direct deposits (pay,income tax etc) and any bills that come out automatically. You can also move RRSP's to your new bank if you have any. Any money left in the CIBC they can take when the CP is filed.
2 - All credit cards need to be turned in regardless of balance. If you keep them CIBC can void the CP if accepted I have no ide about the US one but I would imagine the same rules apply.
3 - It depends on the value of the vehicle. A trustee will be able to answer.
I suggest seeing 2-3 trustees and see what each say. We owed about $130,000 I saw 2 and one said bankruptcy was the only option. The other said they might be able to get a CP for $1500 a month. In our case it was well worth it.
I second everything wetcoaster said! The Trustee should be able to advise the best course regarding your vehicle.
All the best,
What happens if a creditor is sent a creditors package but doesn’t file a claim. Once the proposal is complete & discharged is that particular debt considered void, since they never filed a claim or can the creditor come back to collect since they never filed a claim?
Hi evh27 - The creditor cannot simply ignore the proof of claim package and preserve their rights to collect on debt, the legislation prevents this from occurring current. If the unsecured debt was owing prior to the date of filing the proposal, that creditor is subject to the state of proceedings put in place by the consumer proposal, and therefore unable to collect on that debt. The only way they can collect on that debt is through the proposal itself. Shit that creditor elect, refuse or neglect to file a proof of claim all that happens is they are in eligible for any disbursements in the proposal itself. However the debtor is still cleared from that debt.