Slightly over 75000
Hello, I need your help, I currently owe 82000 in unsecured and secured debt. This 82000 includes a secured loan on my car. I am not over 75000 on unsecured but when you combine both I am. I am about 64000 in debt with unsecured visas and credit lines. Is there anything I can do so that I don`t have to file a Division 1 proposal as this sets u into bankruptcy immediately if the proposal is not accepted. I have a 1 year old baby and want to keep our house to live in. I can`t go bankrupt.
We hear this question a fair bit in our day to day practice.
There are a couple of different approaches that people take:
1) the car loan and the car are listed at $1 each on your list of assets and liabilities – some trustees are ok with doing this, since the loan really doesn’t make up a debt that is being included in a consumer proposal. For my part, I am not comfortable with this approach, but it is fairly common in the industry;
2) reduce your debt total – if you are able, paydown some of your debt. Just make certain you spread it around – if you pay off one or two accounts in total it might cause some technical problems for you; or
3) file a Division I proposal – I realize you are afraid your proposal might be rejected and then you’ll be bankrupt, but if you file a consumer proposal and it is rejected you’ll either have to find a way to repay the debt in full or file for bankruptcy voluntarily to deal with the debts. At the end of the day, it won’t make any difference.
The thing that makes the most sense – find a trustee that files a LOT of proposals and is therefore familiar with what your crediotrs will expect. Nationally, there is one proposal filed for every 6 bankruptcies. In our firm we file a proposal for every 2 bankruptcies – you want to speak to some one with our kind of experience vs someone that only files proposals when they have to.