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Consumer Proposal & secured debt

If I include a secured debt in a proposal that gets accepted can the creditor come after me for any costs associated with the sellingauctioning of the secrued asset?
There is more owing than what asset is worth.

thanks

Posted from: Ontario

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One Response to “Consumer Proposal & secured debt”

Barton Goth – Goth & Company Inc. -Trustee in Bankruptcy said...

Just to clarify, you cannot include a secured creditor in a consumer proposals, only unsecured’s. Now what happens in practice is if you return the collateral attached to the secured creditor prior to filing the consumer proposals, then the remaining balance (which is now unsecured) can be included in the proposal.

Now what happens when a secured creditors seizes and sells property is that their cost of the seizure and sale come out the proceeds of the sale of the property in question. Then anything that is remaining is used to pay down the associated loan (i.e. they seize a car, the sale proceeds pay their associated costs first, anything left is then applied to your loan).

It is the remaining balance of the loan that is included in the proposal.