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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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Consumer proposal

We had a meeting with a trustee. She has advised that the probability of our proposal being accepted looks good. It works out that the creditors will only recieve roughly 30cents on the dollers owed. I hope this will pass as it will be much better for me than a bankruptcy. Does this sound unusual for a consumer proposal to pass on only 30% payback over 5 years. Our trustee does sound very knowledgable and I hate to doubt her, just double checking. Thanks for your time.

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3 Responses to “Consumer proposal”

A licensed trustee said...

While there is nothing in the Bankruptcy & Insolvency Act that says you must surrender all credit cards in a consumer proposal, virtually all trustees recommend it. If you keep a credit card with a zero balance, and that company subsequently finds out that you did a proposal without informing them, they may cancel your card.

The answer to your second question is that yes, in most cases creditors will accept a proposal of less than 50 cents on the dollar if they are receiving more money than they would get in a bankruptcy.

I suggest you contact a licensed trustee to determine what proposal has the most likely chance of success in your circumstances.

A licensed trustee said...

Yes, you are a candidate for a consumer proposal, provided your debts are less than $75,000.

If you expect to be working 40 hours per week, than that would be the income that would be used to determine the proposal payments. Obviously you need to work enough to pay for the proposal and all of your living expenses, so it may be necessary to work some overtime.

I suggest you prepare a list of your normal living expenses and then contact a licensed trustee to determine if a proposal is the correct option for you. I suspect that it is the correct option, but only a trustee who has reviewed your situation in more detail can advise you for sure.

Barton Goth, GCO Inc. Bankruptcy Trustees said...

I have no reason to doubt your trustee, she has probably seen a large number of files and has a great deal of experience to draw from. As for the 30% payback, this is always measured in comparison to the payback creditors would receive in a bankruptcy and as long as there is a decent margin of difference between the two most creditors will cooperate as they will sooner see 30% recovery than the alternative.