FILL OUT THE FORM BELOW AND RECEIVE A NO-OBLIGATION CONSULTATION

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How can we help you?

If you have unsecured debt of under $10,000 and live in the Province of Ontario filing bankruptcy may not be the best option for you. We suggest you contact the Office of the Superintendent of Bankruptcy at 416-973-6441 to discuss your options, or you can visit their website here.

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In your experience

Hi I am considering a consumer proposal and will contact one of the trustees provided in your link section very soon. In my situation the majority of the funds is with one bank (CIBC). I cannot stop thinking of how the bank would let me keep on with my mortgage with them, when they are bound to lose a lot of money if the proposal is accepted, and lose even more money if the proposal is denied and I have to go bankrupt. (Of the $70K I owe, I figure I may be able to afford around 40% of the total, which may not sound great enough for the bank, but would still be more (quite a bit more) then they would recieve on a bankruptcy). Thanks

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One Response to “In your experience”

A licensed trustee said...

You have actually answered your own question: the bank won’t be happy about receiving 40% of what you owe them, but if that is more than they would receive if you filed bankruptcy then they will give serious consideration to your offer.

We often get this type of question – why would any creditor accept less than 100% of what you owe them in a proposal. If the creditors knew that you would keep making your payments if they rejected a proposal then proposals would never be accepted. Unfortunately, once a proposal is rejected (which doesn’t happen very often) most people will file bankruptcy which will result in even less money.

The important thing to remember when you are discussing how much of your debt you will have to repay in a proposal is that you have to offer your creditors more money than they would receive if you filed bankruptcy. If you don’t offer them more than a bankruptcy the creditors will simply vote no.

Some creditors have specific repayment terms that they require, but your trustee will discuss those requirements with you based on your specific situation.

In my opinion, if you have the ability to file a proposal and repay a portion of your debt you should try that before you file an assignment in bankruptcy. You will feel better about yourself and of course, more of the your debt will be repaid (in comparison to a bankruptcy).