CP repayment question

Currently well over 65% of my monthly take home pay goes to my mtg, vehicle loan, personal loan, credit cards & utilities. This greatly impedes my ability to buy groceries & gas & everyday living costs. Is there a maximum repayment amount per month to make pmts affordable? (And how is it decided how much debt is forgiven??)

Posted from: British Columbia

One Response to “CP repayment question”

A licensed trustee said...

You’ve got the concept flipped around backwards – it is not a question of how much of your debt will be forgiven. The question is, “how much of your debt will you have to repay?”

When you offer your creditors a proposal they generally will accep the the greater of two numbers:

1) the amount they would be entitled to receive if you filed for bankruptcy; and

2) an amount large en ough to induce them to accept your offer – currently that means about 1/3 of what you owe.

Your monthly expenses only come in to play in so far that they impact your ability tomake a monthly payment to your proposal. If you can’t afford to make the payment then the proposal doesn’t make much sense and your trustee should tell you to consider other options…