Proposal or Bankruptcy?

September 2nd, 2010 by Questions

I recently lost my job due to a company liquidation. I have around $50,000 in consumer debt (credit cards, line of credit etc.) A car loan and mortgage. I would like to keep my car and home which take 1/2 of my unemployment earnings a month. Would I qualify for a consumer proposal? All my payments are up to date except for the month of September.

Posted from: Nova Scotia


One Response to “Proposal or Bankruptcy?”

, A licensed trustee said:

Sorry, but I can’t tell based on the information you have provided. There are two tests that you need to “pass” in order for your creditors to accept a consumer proposal.

The first is you need to offer your creditors a greater benefit (more money) from your proposal than they would receive if you filed for bankruptcy. The cost of bankruptcy depends on the things you own and your income.

The second test is less precise – you need to offer your creditors enough money in the proposal that they think it is worth their while. That seems to mean at least 30% of what you owe. If you owe $50,000 then your proposal will need to be for at least $15,000, unless bankruptcy will cost more than that.

Use the links to find a trustee in your area so they can review your situation in detail and help you decide whether or not a proposal makes sense for you.

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