Free Consultation

CP vs. Bankruptcy

Based on what I have seen on this site, a CP needs to be at least 1/3 of the debt.

If lets say I had total debt over 300K and a third of that would be 100K.

Now if my income level is only a bit above the threshold and based on my calculations, it looks like my creditors would get $200 + $500 = $700 for 21 months, that totals to about $14,700 in bankruptcy.

While in a CP, based on my income/expenses the most I could possibly offer is $1000 per month for 60 months, that would total to $60,000.

In a CP I would be offering more than 4 times what they would get back in a bankruptcy.

Would this have a chance of being accepted or would I still need to offer at least $100,000 (1/3 of debt) for them to even consider?

Posted from: Ontario

One Response to “CP vs. Bankruptcy”

A licensed trustee said...

You’d think so wouldn’t you? In this particular case, the offer may be accepted because we are talking about some fairly large numbers. The caution is this – the major CDN banks have told the trustee community they are looking for 1/3 repayment – if you make an offer lower than that you have to accept the fact that it doesn’t meet the minimum criteria and therefore has a higher than average chance of being rejected.