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What happens with the monies while waiting for the 6 month payout to creditors

For the consumer proposal my trustee will pay my creditors every 6 months. So what happens with this money that I am paying in during that time. Is it sitting in some account? Is it invested? Do the lower amount creditors get paid off sooner than the others or are the payments divided and everyone is paid their share for the same amount of time?

Posted from: Ontario

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One Response to “What happens with the monies while waiting for the 6 month payout to creditors”

A licensed trustee said...

Your money sits in a trust account – that’s one of the reasons we are called “trustees in bankrupcy” because we hold assets in trust. The money held in trust earns interest and that interest is added to your payments and is distributed to your creditors.

Unless the terms of your proposal specifically require the smaller dollar amount creditors to be paid first, they won’t be. Every creditor receives a proportional share of the dividends when they are paid.