Consumer Proposal & Deposit on House
Hi, I understand I will have to offer more than what my creditors will receive if I filed for bankruptcy. I have a deposit for a pre-construction condo that will be completed 3 years later. The mortgage will start in 3 years when the building is complete and is not under my name, also the deposit was from my parents. The house deed WILL be under my name. Will this deposit be counted as an asset when a consumer proposal assessment is done?
Posted from: British Columbia
If you can prove the money came from your parent and that you have to pay it back then it may be safe – if it was a gift then it probably is not. This is something to discuss with your trustee BEFORE you file…
If your trustee decides the deposit is not protected then it will impact the amount you may have to offer in your proposal. When you file a proposal you need to offer your creditors the greater of (1) the amount they would receive if you filed for bankruptcy (this is where the deposit might come into play) and (2) an amount large enough to induce your creditors to vote for your proposal. Currently that means about 1/3 of what you owe.