Should I pay off car loan before filing a Proposal

October 5th, 2012 by Questions

Hello, I am considering filing a CP but really worried because about 80% of my debt is with scotia and I also have a balance of about $2000 left on my car loan with them. Do you think it would affect me negatively if i take the money from my RRSP and pay off the car before filing the CP? Thanks in advance.

Posted from: Ontario


One Response to “Should I pay off car loan before filing a Proposal”

, Barton Goth - Goth & Company Inc. -Trustee in Bankruptcy said:

I would not recommend paying on creditor off with RRSP funds when you are not providing the same treatment to the rest of your creditors. In terms of being concerned that Scotia will cause you difficulties with the vehicle loan, I wouldn’t think this would be an issue as the legislation reads that you cannot seize a vehicle simply because a consumer proposal has been filed. But discuss this with your trustee before you make any decisions.

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