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bankruptcy or Proposal

I have a house worth approx 470K with a mtge of 415K. unsecured debts of 50k.
Had a failed business which really put me bdhind on cc payments. but now have a full time job. my wife and I make approx $5500- $6k net per month total.
We would like to keep the house and the 2 cars (0 equity in those.)
Is a comsumer proposal a good option? or bankrupcy. Is there too much equity in the house for a bankruptcy.

Posted from: Ontario

One Response to “bankruptcy or Proposal”

A licensed trustee said...

You shoudl be eligible to file a consumer proposal, but the amount of equity in your home will definitely impact the amount you need to offer your creditors.

The current guideline to follow when offering as proposal is the greater of:

1/3 of the debt; and

the benefit your creditors would receive if you filed for bankruptcy

Roughly speaking the equity in your home is wortht between $35 – $55K. In a bankruptcy your creditors are entitled to that equity so your proposal is going to have to offer the same sort of money.

Whatever trustee you decide to see will help you determine a more precise figure.