Consumer Proposal – Lump Sum or Monthly
If I can do a lump sum payment at the beginning of my CP, rather than agreeing to pay an amount each month, is that more or less favourable to creditors? (ie, if I offer $60k on $150k of debt)
Posted from: British Columbia
Generally speaking, everyone would rather have money today than over 4 or 5 years, so lump sums are more attractive than payment plans. Keep in mind, you need to be able to explain where the lump sum is coming from…
When you file a proposal you need to offer your creditors a greater benefit than they would receive if you filed bankruptcy. If your lump sum is something that your creditors may be entitled to in a bankruptcy then it may not be enough to induce them to accept your proposal.
Just make sure you ask about this BEFORE you decide to file. You don’t want to offer a lumps um and then have the creditors ask for the lump sum PLUS payments.