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Selling home during a consumer proposal

I started my proposal, regularly paid all installments up to now. I made a mistake in between: I didn’t know that I can’t sell my house, and if I sold it, I have to pay all the proceeds to my trustee, what is due. I innocently kept paying monthly installment up to now, and at the very end, when my trustee tried to call at my home and couldn’t contact me because I had moved, he sent me an email to inform him, if I had any changed information for my address, ph. no. bankruptcy law. I thought Division1 Proposal was different than bankruptcy and different law? Now what will happen to me, once I send him my new address for sending documents? Is it a criminal act, not to declare the sale of the house? My wife is innocently involved with this case. As a homemaker, she is not involved with any financial matters. Only I make the decisions. Is she trapped with me too?

One Response to “Selling home during a consumer proposal”

Doug Stuive, CA | Trustee | CIRP said...

It is not possible to provide you with advice unless we read the specific terms of your proposal. It is true that you are responsible for keeping your trustee informed of your current address and contact information but they did have an email address so that in and of itself is not an issue. Normally in a proposal your assets do not vest in the administrator of your proposal. This means that you are free to sell or dispose of your assets freely and without notifying the trustee’ office. However, sometimes when there is a large amount of house equity a proposal will contain a clause that states that should you choose to sell your house during the proposal terms you would pay out the proposal early. If this clause is in your proposal terms then you may have an issue. The Bankruptcy and Insolvency Act exists to allow an honest debtor to get a fresh start. The fact that you continued to make your regular payment should work to your advantage. What you did is certainly not a criminal act and making your payments shows you had no intention of preventing the creditors from getting the funds from your proposal. The best thing to do is to simply disclose your new address to your proposal administrator and answer any questions they have about the house. They will advise you on what is necessary in order to ensure you receive the necessary documents that indicate your proposal was fully performed. If your administrator insists that you failed to meet the terms of your proposal as you did not pay it out early with the house proceeds and they are insisting on annulling your consumer proposal, you should discuss your situation with the Office of the Superintendent of Bankruptcy or a bankruptcy lawyer to ensure your five years of payments are not lost should your proposal be annulled.