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REFINANCE AND CONSUMER PROPOSAL

Im currently under a consumer proposal. Im re financing my mortgage and the mortgage broker found me a better interest rate with another bank. Its all approved however, my real estate lawyer found out theres a judgement under the house(under my name from RBC) which was filled before the proposal. The trustee has requested RBC to withdraw the judgement but they are not removing it. Basically I need to pay that off to process the re financing. My question is, RBC was part of my proposal and after paying RBC off the trustee said they will need a copy of the paid off judgement and they will be doing somethings for the proposal. So what happen to this money that Im paying RBC to remove the judgement? Is my proposal amount getting amended? Is mymthly payments for the proposal going to be lower? Thank you

Posted from: Ontario

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One Response to “REFINANCE AND CONSUMER PROPOSAL”

A licensed trustee said...

Speak to your trustee again – here’s how the law works if RBC won’t remove the Writ. When you refinance an amount equal to the Writ must be paid to the Sheriff’s Office. The proposal stays (stops) the Sheriff from paying RBC, instead the Sheriff must forward the money to your trustee. Since you filed a proposal your trustee has no legal right to keep the money so they have to forward it to you.

The problem with this is it may take a few weeks for the money to get to you…

We have found that in most cases, when this is explained to RBC’s lawyers, they will consent to waiving their right to the Writ long enough to allow you to refinance. They don’t remove the Writ until the proposal has been paid in full, but by waiving their rights it means the funds won’t have to go to the Sheriff then your trustee to get to you.