Postponing a Consumer Proposal until equity is sold
We are cash poor and property rich.
We have substantial credit card debt that we cannot get a debt consolidation loan to pay off.
We are selling our home when our last child is in college – 1 year from now. (There are several other personal reasons that we can’t move until next year)
As our home has equity – the proceeds would be more than enough to satisfy the credit card companies.
Have you ever heard of a consumer proposal where the creditors will postpone the debt until the equity is sold??
Sure we have – in the “business” that is commonly referred to as a holding proposal.
The terms usually involve a monthly payment of some sort with a portion of the house proceeds when it is sold. The proposal would also include a clause requiring the property to be listed for sale within a specific period of time – if it is not the proposal would be in default and canceled.
I word of caution – these can be a great solution for some people, but once you start the process you will be forced to finish it. If you have any doubts about selling the property in a year then don’t make the offer.