More than 50% with one creditor

April 1st, 2011 by Questions

We have more than 50% of our debts with one bank- What are the chances that they will not reject the proposal as we cashed out our RESP and now we deposit all our money in another bank. Please advise

Posted from: Ontario


One Response to “More than 50% with one creditor”

, A licensed trustee said:

Cashing out the RESP is not likely to have an aimpact on the bank’s decision regarding your proposal. The things that they care about: how long ago did you apply for new credit, and more importantly, how much have you “run up your debts” in the last few months.

When a creditor controls the voting process (ie they have more than 50% of your debts by value) they tend to take a closer look at your budget and your history. It is not uncommon for the creditor to ask for more than they normally might accept if they think there is “room to manuever” in your budget.

As an example,. let’s say you decide to offer your creditors $250 a month for the next 4 years. A creditor with over 50% of the votes might counter offer $300 for 5 years.

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