I have high balances on my credit cards and two PLCs which total to $73,000. My husband is ill and cannot work any more and does not receive any money! I have a 2008 car which is leased on my name and an uncle`s. If I file for a consumer proposal, do I lose my car? Also, I have some money saved up in my child`s account which is joint with my name, do I have to give up that money? What about my RRSPs? Do I lose that? How much does it cost me to file a consumer proposal? What are the chances of it being accepted? How much do I pay monthly if it is accepted?
Consumer Proposal
posted by Questions @
1 Expert Comment:
At February 25, 2009 |
8:47 am
, Barton Goth, Trustee in Bankruptcy Said...
You clearly have a great number of questions, many of which cannot be fully explained in this type of venue, so I would suggest you contact a trustee directly to enable a little more detail. Having said that I will do my best to address all of these items in the same order they were presented.
Firstly your vehicle. Typically a vehicle is not impacted by a consumer proposal and you can continue to make the payments on the lease as originally contracted. While this is technically up to the leasor in practice we find that if you are up to date on your payments most leasing/financing companies don’t have a problem.
Second, the money that is the account jointly held between you and your child. If you have put the money there it is not considered the child’s asset as the money is directly traceable back to you. As a result it isn’t directly touched when a proposal is filed, but because in a bankruptcy it would be the funds are then used to estimate what the creditors would receive in a bankruptcy and in a proposal you would have to make sure you offer more to the creditors than they would receive in a bankruptcy. So the monies are not lost in the proposal, but used in determining what has to be offered to the creditors.
Your RRSP’s, this is essentially the same as the funds in your child’s account. A portion of these may be lost (i.e. any contributions made in the last 12 months) and while these aren’t automatically lost in a proposal they must be considered when determining what to offer the creditors.
The fees charged in a consumer proposal are calculated according to a tariff stipulated by the federal Bankruptcy & Insolvency Act and are based on the total amount offered in the proposal. Although the most important thing about the fees is they come out of the monies offered to your creditors.
In terms of acceptance, as long as the proposal is well thought out, the vast majority of proposals I see are accepted. While I haven’t calculated the percentage, just based on observation it would be significantly greater than 90% of the proposals are accepted by the creditors. Now this doesn’t mean that we don’t have to negotiate a little with the creditors to get the proposal accepted, but most creditors are fairly open to the idea of a proposal.
Finally you asked about the monthly payment. Every proposal is different and it is based on your ability to pay, the amount and types of debts you have and what the creditors are willing to do.
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