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Consumer Purposals and Co-signers

What happens to any amount not settled in a consumer purposal when there is a co-signer? Also, can someone who has filed a personal purposal also file a seperate purposal with their ex for a joint debt the ex accumulated alone?

Posted from: Alberta

One Response to “Consumer Purposals and Co-signers”

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

I am not sure I fully understand your question, but I will try to clarify a few things.

First of all, when you file a consumer proposal you do not get to pick an choose your debts, it must be made to all of your unsecured creditors. This is any debt that you are listed on, including joint debt. What effectively this will do is remove you from being responsible for the debt and your ex will have to deal with the debt alone. Your ex will technically be responsible for the total amount owing less any distributions received through your consumer proposal. So you shouldn’t have any need to file a second proposal. This same principle applies to co-signers. You are cleared from the debt but the cosigner must make arrangements to pay the outstanding amounts.