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consumer proposal.

I am using a credit counselling service for about 2 years . My salary is approx. 3800 a month and my debt was 61,000 initially . My payment was 1000 a month for 4.5 years . I had a 10,000 credit line also . I was advised not to include this with all of my other debts.I was told that the interest rate was low and that since I had kept this bill current it was better just to pay it.I was only paying the interest on the debt . Two years later the bank has told me that my account is closed and that I will need to pay 260/month.I had thought I would keep up the interest and once I finished paying everything I then could pay it. I could add this debt to my big payment through the service .It would still mean an extra 250 month for it.I can’t afford this amount of money and would like to seek a proposal .My pay is larger because I work 80 hrs week ,seven days a week and I take 3 weeks off for vacation. I have been doing this for 5 years now. I can’t keep up this pace much longer.I want to go back to the 40 hour work week as soon as possible.This would cut my pay to 1800 a month. How would I handle my salary when negotiating a proposal . I won’t go back to 40 hours until I have a proposal agreed upon.I would try and keep the hours for a year possibly if I could work something out with my creditors .If I drop back to 40 hours now, I will not be able to pay them.Would I be a candidate for a proposal ? Any ideas ?

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One Response to “consumer proposal.”

A licensed trustee said...

You’ve asked a couple of different things – let’s take them one at a time.

First, if your debts are $125,000 you may be looking at a Division I proposal, not a consumer proposal. The principle difference between the two is that if you file a Division I and it is rejected you are deemed to have filed bankruptcy. Consumer proposals have no such automatic bankruptcy trigger.

Second, you’ve asked about fees. In a consumer proposal your trustee is paid a flat $1500 preparation fee and then 20% of any money that flows thoruhg their trust accounts on your behalf. (These fees are set out right in Canadian bankruptcy law). If you file a Division I proposal the terms regarding fees will be wrtitten into the document and agreed to by yourself and your creditors “up front”.

Finally, you’ve asked about your real estate deal. I don’t think I can give you a answer without knowing a lot more about the transaction. When you meet with a trustee make certain you bring as much information about the property and the deal as you can – intuitively, it should be possible to structure the deal to allow you to conitnue, BUT it may not be the best course of action for you. You’ll have to make that decision after you speak to a trustee.

Good luck.