Clint
February 5th, 2011 by Questions
What are the consequences if I do not disclose all debts in a consumer proposal and am caught?
Posted from: British Columbia
CATID10
One Response to “Clint”
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February 06, 2011 at 1:23 pm, A licensed trustee said:
The answer depends on “how large” the debts you didn’t disclose are, and whether or not the Court thinks you deliberately failed to disclose them.
Let’s start with ther second factor – if you simply “forgot” to list a debt you are in less trouble than if you deliberately decide not to list something and the debt is discovered by your trustee. Before you ask, trustee don’t go digging into your past, BUT we live in a small world and you would be amazed at how many people call our office with “tips” about hidden assets and undisclosed debts. The odds of getting caught are pretty high.
The other factor is the size of the debt. If you disclose $50,000 in debts when you file a proposal and an additional debt worth $1,000 is discovered later it won’t cause as much trouble as a debt at $10,000 or $20,000 or more… The higher the debt, the bigger the problem.
Worst case scenario – the whole proposal might be cancelled. A more likely solution is that your payments will be increased so that all your creditors receive the same repayment that they were going to before the new debt was discovered.