August 8th, 2013 by Questions
I currently owe 60% of my debt to a bank and 40% for student loans (is not past the 7 year mark). My question is this: If I do a proposal will my student loan receive 40% of the money (after trustee fees and filing fees are taken off) or will they receive less than 40% because they will be waiting with outstretched hands after I complete a proposal?
Posted from: Ontario
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August 08, 2013 at 6:46 am, A licensed trustee said:
It all depends on whether or not the student loans submit a claim in your proposal. If they do, they are entitled to their proportional share of the money, even though at the end they have the right to try and collect the remaining balance from you when the proposal is over.
It’s a bit strange, but because your student loans aren’t old enough to be discharged (eliminated) they actually get to accrue interest during your proposal. What often happens is the payments the student loans receive from the proposal covers the interest. At the end of the proposal you may still owe most of the student loan amount.