Filing Proposal Next Wednesday - 21 Aug

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Time618a

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Filing Proposal Next Wednesday - 21 Aug
« on: August 16, 2013, 10:04:46 PM »
Well it's finally caught up to me...,time to pay the piper;

I'm filing a proposal next Wednesday; owe about 73k unsecured, have a pension coming in plus a good job' was hoping to retire in two years but that's not going to happen; my proposal will be offering $1000 a month for five years (advised by the trustee as my cash flow will allow me to afford it...) but I will be trying to pay it off over 36 months; my trustee has calculated that this is a good offer & the creditors should be getting about 75% of what they are owed; I've been going too many years with the thought "Sure I can afford the payments..." but once retirement approached it was a rude awakening; anyway wish me luck, I hope they'll accept my offer; I've never missed a payment except for this month I stopped paying as I knew I would be filing a proposal; I'll post back here with my progress as I go through the process, cheers

Jim
« Last Edit: August 18, 2013, 02:54:29 PM by Time618a »

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smithy123

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Re: Filing Proposal Next Wednesday - 21 Aug
« Reply #1 on: August 19, 2013, 09:36:24 AM »
Good luck!  This seems fairly high for 73K unsecured.  With over 60K in income I had $600 / month for five years accepted on nearly 65K unsecured.  I am sure the creditors will accept 75 cents on the dollar as they have been known to accept as little as 33 cents!

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Dumdum

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Re: Filing Proposal Next Wednesday - 21 Aug
« Reply #2 on: August 19, 2013, 10:53:47 AM »
Hey, good luck Jim! Hope it works out for you. I'm sure it will, with that amount of payment for the amount of unsecured debt. I pay $700 for slightly less than $123K so it should fly. Perhaps you could even get your trustee to offer less because that is very high. You are paying back $60K of your $73K debt. You should be half of that easily. Perhaps another trustees opinion before you do this would be in order.

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Stewart

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Re: Filing Proposal Next Wednesday - 21 Aug
« Reply #3 on: August 19, 2013, 11:45:37 AM »
With a "pension [and] a good income", $60k total is a good offer.

Consider the scenario that the debt is mixed between 8% line of credit and 19% credit cards, figuring an average of 15.9% interest the total repayment scenario could look like this;

$1218/Month for 10 years = $146,160 total repayment -or-
$1067/Month for 15 years = $192,060 total repayment

All told, $60k total repayment (of which 20% goes to the proposal administrator/trustee's office, don't forget, so the creditors only get $48k of that) isn't all that bad when you take everything into consideration.

Think of it this way - to get a lower payment, you'd likely have to quit your job (vis, retire early) and lose that good income just to save $200-300/month. Is it worth the sudden, drastic change to your lifestyle?

Of course if they can get the payments lower it's always a plus for you, personally, but if you offer too low they may refuse the proposal and force you into bankruptcy which could have implications if you have a mortgage on your home.

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Time618a

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Re: Filing Proposal Next Wednesday - 21 Aug
« Reply #4 on: August 21, 2013, 07:17:29 PM »
Met with the trustee this morning; paperwork signing process & question/answer took about 45 minutes; my wallet is much lighter now after I gave her my six credit cards & two bank debit cards. Now we wait; when proposal is accepted (& trustee is quite confident that it will be...) I will be making first payment around 28 Oct; have a great online budget set up with Mint (dot) com & it's amazing how well I'm getting used to only paying with debit/cash through our new bank account with Scotiabank. I will never, ever be a slave to credit again. ;D

Jim

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JEC

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Re: Filing Proposal Next Wednesday - 21 Aug
« Reply #5 on: August 21, 2013, 08:20:28 PM »
Congratulations for joining the ranks of the 'lighter and wiser'....I know exactly how you feel.  It's a good feeling isn't it??

My monthly payment is high too....$700, but I have equity in my house so had to consider that as an asset.  I'm almost a convert to cash now. I actually do not like using a (secured) credit card. It comes in handy for paying on-line and reservations...but I want to pay it off right away.  They advise not to pay it off on the spot....and that your credit score benefits if you pay it a few weeks later, but not carry a balance.  Cash or debit is the way to go. It's so much simpler than trying to remember when the due date is.  I can't believe that I had so many credit card balances to juggle at one time...I actually ask myself....how stupidly stupid could I have been???  But that's in the past now...and I'm on my way to a good financial life.

Give yourself a good pat on the back...you deserve it!

JEC 

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internalaudit

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Re: Filing Proposal Next Wednesday - 21 Aug
« Reply #6 on: August 22, 2013, 09:30:13 AM »
With a "pension [and] a good income", $60k total is a good offer.

Consider the scenario that the debt is mixed between 8% line of credit and 19% credit cards, figuring an average of 15.9% interest the total repayment scenario could look like this;

$1218/Month for 10 years = $146,160 total repayment -or-
$1067/Month for 15 years = $192,060 total repayment

All told, $60k total repayment (of which 20% goes to the proposal administrator/trustee's office, don't forget, so the creditors only get $48k of that) isn't all that bad when you take everything into consideration.

Think of it this way - to get a lower payment, you'd likely have to quit your job (vis, retire early) and lose that good income just to save $200-300/month. Is it worth the sudden, drastic change to your lifestyle?

Of course if they can get the payments lower it's always a plus for you, personally, but if you offer too low they may refuse the proposal and force you into bankruptcy which could have implications if you have a mortgage on your home.

I'm sure Time618a exhausted all possible means and he/she likely didn't have enough equity in his home or is currently renting.   

Would the creditors find out if someone filing for a C/P does own a home with enough equity but does not disclose this information?  I did read that starting 2009, our credit reports will have included mortgage details but I'm not so sure I've seen mine, at least when I last asked for my credit reports.

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Dumdum

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Re: Filing Proposal Next Wednesday - 21 Aug
« Reply #7 on: August 22, 2013, 09:43:24 AM »
Congrats Jim,
Happy to hear that you went ahead. As JEC said "lighter and wiser"! :)

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Time618a

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Re: Filing Proposal Next Wednesday - 21 Aug
« Reply #8 on: August 23, 2013, 05:16:54 AM »
Congrats Jim,
Happy to hear that you went ahead. As JEC said "lighter and wiser"! :)

Thanks JEC...

In answer to another question I get credit reports from Transunion & it does not list my mortgage though I've also heard that credit reporting bureaus will at some point will be adding them to the reports;

When was preparing to consider a proposal I decided to lock in my then variable rate to a fixed 10-year at 3.69%. As current & recent mortgage rate increases have shown, it's only going up.  Also this way when it's time for renewal the slate will be clean. Note that I have a very small amount of equity in my home so that was not a factor in considering bankruptcy versus consumer proposal. I gave the trustee the municipality assessed value of the house and that was considered good enough.  As originally mentioned, I was previously planning to retire in two years & realized that there was no way I would be able to carry the debt load. When the trustee crunched my current household income we realized that my creditors would not likely accept a lower number than $1000/month/60 months in a proposal versus bankruptcy (which would be a household of two with surplus income of approx. $2200/month x 21 months=$46200) As said before, I plan on trying to pay the 60k down as fast as possible hopefully by 36 to 40 months inside of the full 5 years.  Anyway hope that this explains MY situation and I really appreciate the information/comments of all on this group, thanks!!!

Jim

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internalaudit

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Re: Filing Proposal Next Wednesday - 21 Aug
« Reply #9 on: August 23, 2013, 10:10:33 AM »
Hi Jim,

Thanks for your response.   

You did the right thing, in my opinion, going with a 10-year fixed at 3.69%.  You don't want to be held hostage by your mortgage lender though a few have suggested visiting the local credit union for decent mortgage rates.

I am kind of in the same boat as you but what complicated matters is about $100k of home equity, significant amounts owing to family and friends and a big surplus payments.  We expect significant tax refunds (taxes paid from our salaries).  I had been paying minimum until earlier this year when I recalculated and thought to myself, maybe it didn't make sense for now because of the breadth of our creditors (will be harder to borrow / bootstrap for future business since we may be blacklisted) and we were able to covert two of our 22% interest rate credit cards to 12%.  So we have credit facilities ranging from 4-12%.  Only RBC played hardball and didn't want to convert our 22% credit card to a lower interest rate one so I move funds around and paid it down completely.

I agree that if the creditors don't want to accommodate the lowering of interest rates from 22% or more, it makes sense to just file for CP.  I think 12% is manageable and once I file our back tax returns, we'll be able to use some of those refunds to pay at least 1/3 of the debt.

We've put the prospects of filing for CP on hold but if either one of us are shown out the door in our workplaces, we may reconsider doing so. 

Best of luck to all of us and may we all be blessed going forward though the job market isn't really getting any rosier. :(




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Time618a

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Re: Filing Proposal Next Wednesday - 21 Aug
« Reply #10 on: August 23, 2013, 07:00:29 PM »
We'll, judging by the hold that was put on my chequing account today I think that BMO is the first to receive my proposal info. Pretty fast as it was filed electronically by the trustee on Wednesday. My overdraft & credit card just went to zero credit remaining and the below hold was put on the chequing account....I guess they're hoping some funds may accidently be deposited & they wanted to make sure they could hold all of it...wow $999 million...


Hold Type                   Start Date   Available Date   Amount
Branch Hold    Aug 23, 2013    Jan 7, 2014    $999,000,000.00 CAD

Jim

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Dumdum

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Re: Filing Proposal Next Wednesday - 21 Aug
« Reply #11 on: August 24, 2013, 10:37:01 AM »
See if you can withdraw that!!! LOL ;D

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internalaudit

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Re: Filing Proposal Next Wednesday - 21 Aug
« Reply #12 on: August 26, 2013, 09:40:46 AM »
We'll, judging by the hold that was put on my chequing account today I think that BMO is the first to receive my proposal info. Pretty fast as it was filed electronically by the trustee on Wednesday. My overdraft & credit card just went to zero credit remaining and the below hold was put on the chequing account....I guess they're hoping some funds may accidently be deposited & they wanted to make sure they could hold all of it...wow $999 million...


Hold Type                   Start Date   Available Date   Amount
Branch Hold    Aug 23, 2013    Jan 7, 2014    $999,000,000.00 CAD

Jim


I thought once a CP is filed, banks are not allowed to place any more holds on accounts?  I'm surprised they can still do so.  No wonder, Trustees always advise to switch payroll to a bank one doesn't owe any money to.

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NotATrust-E

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Re: Filing Proposal Next Wednesday - 21 Aug
« Reply #13 on: August 26, 2013, 12:02:15 PM »
I think you may be correct. Section 69.2 of the BIA states that upon the filing of a consumer proposal:

"no creditor has any remedy against the debtor or the debtor’s property, or
shall commence or continue any action, execution or other proceedings, for the recovery of a
claim provable in bankruptcy until:

(a) the consumer proposal or the amended
consumer proposal, as the case may be, has
been withdrawn, refused, annulled or
deemed annulled; or
(b) the administrator has been discharged."


I thought once a CP is filed, banks are not allowed to place any more holds on accounts?  I'm surprised they can still do so.  No wonder, Trustees always advise to switch payroll to a bank one doesn't owe any money to.

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Time618a

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Re: Filing Proposal Next Wednesday - 21 Aug
« Reply #14 on: August 26, 2013, 01:43:05 PM »
I changed my banking to Scotiabank once I decided on proposal action;

Once that was done I confirmed with all depositors for pre-auth transactions that they had my new banking information;

Jim

Update: My proposal has made it to my Transunion credit report; most of my creditors are now showing derogatory details & the public record part shows the proposal filing info;
« Last Edit: August 26, 2013, 08:26:57 PM by Time618a »

 

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