explanation of this statement

  • 4 Replies
  • 4160 Views
*

doggypup

  • Guest
explanation of this statement
« on: May 24, 2014, 01:28:00 AM »
Hello

The trustee is on holidays for 10 days and he apparently left the assistant to complete the paperwork so it is ready for signing the day he returns.

I have been emailing back and forth with the assistant so that she has accurate information for the Consumer Proposal.

When I had the initial meeting with the trustee, I was clear that it was the CP that I wanted. He indicated that the monthly payments would be $675 over five years (wrote on this spreadsheet he provided to me)

Anyway after several emails of me saying "consumer proposal", the assistant finally sent an email clarifying the situation to me and letting me know that this was not a CP.

Her exact statement is this:
"you are filing an assignment in bankruptcy and will settle with the estate for the equity"

I am shocked because I take this statement to mean, that my house is going to be sold. This wasn't even part of the original discussion.

If someone could clarify this further, I would be most appreciative. Thank you.

BTW - I am in Ontario

*

NotATrust-E

  • Sr. Member
  • ****
  • 263
  • +1/-0
    • View Profile
Re: explanation of this statement
« Reply #1 on: May 24, 2014, 06:25:17 PM »
Firstly, this is crazy. Don't allow anything to get signed until you understand completely. If something goes wrong, make a complaint to the Office of the Superintendent of Bankruptcy and get everything in writing.

With respect to the statement: When you file for bankruptcy, all of your property, (with some exceptions like cars below a certain value and personal/household goods) become the property of the trustee so he can sell them for the benefit of your creditors. However, trustees don't want to sell houses, because that's expensive. So instead, he has decided that he will sell you the equity in your own house. $675 x 60 months is $40,500. Do you have this much equity in your house? I.e. Is your house worth $40,500 (minus 3%-7% selling costs) more than the mortgage? If not, something is seriously wrong.




*

doggypup

  • Guest
Re: explanation of this statement
« Reply #2 on: May 26, 2014, 08:56:54 AM »
Thank you for taking the time to explain.

I really don't see the advantage of bankruptcy? How will I be better off as opposed to the CP?

I know that the situation that provides the most amount of money to the creditors is the one that is chosen, but that is what was happening in the Cp scenario.

Plus, how am I assured that the house will not be sold some months later? Everything seems rather vague to me in a bankruptcy.

I know that in a CP, it is decided whether or not you pay over forty-eight months or sixty and in my case, it was deemed to be sixty

How many months are chosen in bankruptcy? The information I have found on numerous trustee websites is that the limit is thirty-six months that you are bankrupt.

This whole thing has un-nerved me now, as I do not know why the trustee is pushing bankruptcy when we spoke CP

« Last Edit: May 26, 2014, 07:55:59 PM by doggypup »

*

NotATrust-E

  • Sr. Member
  • ****
  • 263
  • +1/-0
    • View Profile
Re: explanation of this statement
« Reply #3 on: May 26, 2014, 08:48:16 PM »
I'm not sure why a bankruptcy has been suggested. It's possible that the payout in a bankruptcy would be greater than the amount that you said you could offer in a proposal.

I know that in a CP, it is decided whether or not you pay over forty-eight months or sixty and in my case, it was deemed to be sixty

This isn't exactly correct. A consumer proposal can be one month up to a maximum of 60, as long as the creditors accept it and it creates a better return than in a bankruptcy.

Plus, how am I assured that the house will not be sold some months later? Everything seems rather vague to me in a bankruptcy.

There is no assurance (I think). You may have to check into this - the agreement to buy back the equity may not be binding.

How many months are chosen in bankruptcy? The information I have found on numerous trustee websites is that the limit is thirty-six months that you are bankrupt.

In each case below you can get an automatic (non-court) discharge, except if something goes wrong, such as you not paying the trustee.

First time bankrupt: Automatically discharged in 9 months.
First time bankrupt with surplus income (Likely your case): Auto discharged in 21 months; you must pay surplus.
Second time bankrupt: Automatically discharged in 24 months.
Second time bankrupt with surplus income: Auto discharged in 36 months, you must pay surplus.
3rd or more: Court discharge only.

This could be a misunderstanding, or a bankruptcy may be the option that pays out more to the creditors. Either way, keep looking into it.

*

doggypup

  • Guest
Re: explanation of this statement
« Reply #4 on: May 27, 2014, 08:30:56 AM »
Thx again for detailed information.

I guess I just have to wait until the guy comes back from holidays. The assistant is extremely helpful and friendly, but I am afraid somewhere some wires got crossed.

Everything was so clear when the CP was decided, that now it is just muddled water.

It's great that you took the time to respond. I appreciate it.

 

Sitemap 1 2 3 4 5