Proposal denied-Options?
We had a proposal offering 500month, which was about what we could afford. Creditor with highest voting power over 50% has asked for 950/month almost double. We definitely cannot afford that. Is our only option bankruptcy? Please help
Posted from: Ontario
The trustee you are dealing with should have told you in order for a proposal to be aaccpeted you need to offer the greater of: (1) what the creditors would be entitled to in a bankurptcy, and (2) enough to entice them to agree (right now that is usually 1/3 of what youowe).
In situations where one creditor controls the vote (you owe more than 50% of your debts to one creditor) some of the banks tend to get “pushy”. By asking for twice what you offerred they are basically saying they aren’t interested in your offer – they think you should file bankruptcy.
So, your options are limited. If you can’t afford the terms they have asked for a proposal is out. That leaves bankruptcy or continuing to muttle through on your own. Unless you have concerns with the trustee you dealt with for the proposal, you should have a long conversation with them about how bankurptcy works and the ramifications of filing. Of course you may switch to a different trustee, iff you don’t want to use the same people again.