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How does selling a house affect a consumer proposal?

How does selling a house affect consumer proposal. What is the time frame. Most of the proceeds from the sale went to debt. 15000 went to pay a relative who did the renovations to sell. They used it to use as a downpayment on their house.

Posted from: Ontario

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One Response to “How does selling a house affect a consumer proposal?”

Gareth Slocombe, Trustee | C.I.R.P | C.A said...

In order for the trustee to recommend acceptance of the consumer proposal to creditors, he must be able to show that the consumer proposal will produce a better return to creditors than a possible bankruptcy filing.

In this case, a bankruptcy filing could result in the possible recovery of some of the recent payments you made on your debts and to your relative for the renovations. (This can be a complicated area and more details would be required regarding timing and amounts of the payments.)

Nonetheless, the proposal could be recommended to creditors if the total payments to be made in the proposal will exceed all realizations in a possible bankruptcy from all sources such as surplus income and any recovery of any of those payments made out of the house sale proceeds.