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my ex-wife’s consumer proposal on our joint credit card debt

My ex-wife did a consumer proposal on our joint credit card debt, totallying $8000, together with her personal debt. The total consumer proposal that she did is 17500, paying 350 per month over the period of 5 years. However, because the 2 credit card debt`s were joint, the creditors are asking for me to pay them, eventhough they have accepted a consumer proposal from my ex-wife. Now, I have the money to pay these creditors, but I`m asking if I do pay them, will my ex-wife`s consumer proposal be reduced , from 17500 – 8000 = 9500. Also, she owns 25% of the house, with me owning 25% of the house, and 2 other people owning 50 % of the house.

Posted from: Ontario

One Response to “my ex-wife’s consumer proposal on our joint credit card debt”

A licensed trustee said...

There are two sides to yuor question. First from your persepctive, if you were jointly responsible for the debt (and it sounds like you agree that yuo were) then the creditors have every right to try and collect from you regardless of your ex’s proposal. If yuo have the means to repay the debt you or you run the risk of legal action.

From your ex’s perspective, if you repay the debt it will reduce her total debt and therefore she may want to speak to her trustee about amending her proposal to reflect the new reality. In cases such as this we usually determine what the original projected rate of return to the creditors was (including the joint debt) and then determine how much the person should still be paying to give the remaining creditors the same reate of return.

Keep in mind that a proposal is an offer to repay a portion of someone’s debt. Her creditors may accept the amendment to reduce the payments or they may simply want to stay with the original and recover more money…

Have you ex go and speak to her trustee after you’ve paid off the joint debt.