Equity & Consumer Proposal
If i have some equity ($40,000) in my house can i still submit a consumer proposal to my creditors & keep the equity in or out of the house. i.e. keep my house or sell it and in both scenarios keep the equity. (P.S. my & daughter have been heavily helping me financially over the past two years and I would like to leave something behind for them. I`m 61, I have no other assets, no pension, i was self employed & now working contract jobs. my unsecured debts are $43,000. And, I have a GIC $50,000 US dollar securing a $70,000 CDN personal Line of credit which is maxed. This was done back in the day when the one US dollar was 1.5 CDN. So there is another 20,000 of a debt in here, over and above the $43,000 noted above.)
Can I keep the equity & can I file a consumer proposal? or should I just file for bankruptcy & save my children the headache that I`ve caused them?
Posted from: Ontario
At this point you really need to sit down with a local trustee as your questions are more involved than this blog lets me explore. However, I can tell you this, in a bankruptcy all of the equity in the house belongs to the creditors. As a result if you are going to file a consumer proposal you have to offer up at least as much as the creditors would get in a bankruptcy, so you would be starting with at least a $40,000 offer. This doesn’t mean that the proposal isn’t possible, but may make it difficult.
The second thing you will find is that the main advantage to a consumer proposal is that it allows you to protect your credit rating somewhat, but at your age that likely isn’t of any value. So you may find that the bankruptcy makes more sense, but this isn’t something you will really be able to determine until a local trustee assesses your situation in more detail.