Home Equity & Consumer Proposal
We have approx 40,000 equity in our home. Would you expect the creditors to agreeto the proposal with this amount of equity? The majority of our debt is unsecured credit cards through the same lender as is our mortgage. If they did agree to the proposal, would they even consider renewing the mortgage when it was time to renew it in approx 2 years? or would we have to try and find another lender at that time?
When putting together a proposal the first thing that must be done is to offer more to the creditors than would be available in a bankruptcy. So if you equity in your home we must determine how this will be treated in a bankruptcy before we can determine what the creditors would accept. The difficulty with this type of blog is that it serves every province in Canada and each province has a different exemption level for equity in the home (i.e. this varies from $40,000 in Alberta to Nil in Ontario). As a result of this you will need to contact a local trustee to determine what it will be necessary to offer the creditors.
As for the renewal of a mortgage, this is possible after the filing of a proposal, you will find that the renewal of a mortgage, particularily at your current institution, is easier than you may think.