July 15th, 2011 by Questions
I had a couple of questions regarding personal bankruptcy versus a consumer proposal.I’ve been reading about these options as well as a debt management plan and debt cosolidation loan.I probably won’t qualify for the last two but my best option may be the proposal.Was wondering what % of debt is usually paid in these situations?I know that the creditors have to agree to the reduced settlement,as long as 75% are on board.Was also wondering what happens to your credit report after filing bankruptcy or a proposal,and all of the late payments etc that are already there?Is bank overdraft included as a debt – if your bank account is overdrawn by $3500 for instance?Also what are the fees involved in both situations?
Any help would be greatly appreciated as I make a decision on this matter,Mike
Posted from: Ontario
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July 15, 2011 at 1:01 pm, Barton Goth - Goth & Company Inc. -Trustee in Bankruptcy said:
Your questions are good questions, but to extensive for this type of a forum. What you should do is contact a local trustee and they will run through all of this information as part of the free consultation they provide. But I will try to briefly answer some of the questions raised.
As for the percentage of debt that must be repaid, it changes in every situation and is based on a combination of factors (i.e. income, expenses, nature of debts, amount of debts, and type of assets you own). As a result it is very difficult to project without properly reviewing your situation.
Now you are a little off in the percentage, you only need a majority of your creditors to cooperate with a consumer proposal, not 75%.
Your bank overdraft is included as part of the proposal and the fees for a bankruptcy or proposal are set by statute and are based on what goes out to the creditors and when you meet with the trustee they will outline this for you.