Consumer proposal where no mortgage and substantial equity in house

October 17th, 2008 by Questions

I`m considering filing a consumer proposal. I have 65K in credit card debt, line of credit and a personal loan. I have a very secure, high-paying job (90K a year) and am a joint owner of a house (principal residence) with no mortgage and an appraised value of about 400K. Will my ownership stake in the house present a obstacle in the proposal process? Will I be pressured by the creditors to put a mortgage on the house to pay off the debts (I really don`t want to do that and the other co-owner won`t go for it anyway). Thanks in advance for any advice.

Posted from: Ontario

Questions

One Response to “Consumer proposal where no mortgage and substantial equity in house”



October 18, 2008 at 10:42 am, A licensed trustee said:

I am sorry to be the bearer of bad news, but if you have $200K in equity in your house (your share of the $400K you mentioned) you are not eligible to file a consumer proposal.

In order to file a consumer proposal you must be insolvent. If you sold the house you would have more than enough money to repay your debts and therefore you are not insolvent.

You might want to look into credit counseling as an alternative way to deal with your debts.

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