Debt, Bankruptcy, & Consumer Proposals

Discussion Categories => Consumer Proposals => Topic started by: jules123 on October 27, 2013, 12:42:48 PM

Title: Not sure what to do.
Post by: jules123 on October 27, 2013, 12:42:48 PM
 Hi, I am in a financial disaster.  I have approximately 150K in unsecured debt ( credit cards and LOC) the LOC is with my bank that I have been with for over 35 years.  I also have a mortgage of $235K and a home equity LOC of $83K. 
I have a good job, been there 1 year 7 months.  I make 90K a year.  I got into this mess as I lost my job  6 years ago in a massive layoff at a major corporation.    I was making a salary of 180K, had a nice house and had done major renovations in it.   Boom no job, yes I did get a severance package, but it did not last long.  I was out of work for over a year and could not find a job in my field.  Even tried looking outside my field and still could not find one.  Sold my house and bought a townhouse.   Finally was offered a position at $50K a year with commission.  Well the first year I managed to make around 75K, second year similar, 3rd year was not so good.  The company I worked for was facing severe financial problems due to expanding too quickly.  The fourth year there I was layed off along with 80 other reps.  It took me another year and 3 months to find the job I have now.  Well being off without employment took its toll on my LOC and credit cards.  UI does not exactly pay all the bills!    Fast forward to today, I am up to my neck in debt.  I have never missed a payment yet, but stealing from Peter to pay Paul only works for a while.   I know I have to do something, and was thinking of filing a Consumer proposal.  Problem is, my job requires me to travel and I need to have a credit card for hotels and car rental.  The company reimburses me for my expenses.   I know I can get a secured credit card, but I need to have the cash to load it with.   I am single and have my son living with me.  No one knows the financial mess I am in and I need some answers.  That is why I am reaching out to this group. 
Title: Re: Not sure what to do.
Post by: mike72 on October 27, 2013, 02:11:45 PM
Welcome Jules123, You've come to the right place.
I was also in your shoes 3.5 yrs ago.  My debit was a little smaller than yours, but all debt is the same. I had buried myself in a hole i couldn't get out. I was getting collection letters, harassing calls, i even had a garnishment on my wages. I thought i was done for, till i did a CP.  The biggest challenge is given up all your credit cards.  But you can get pre-paid cards or even a secured card. 
As soon as i did the CP i felt like i was out of the hole and could breathe again. The Garnishment stopped, no more letters, the calls stopped.  I made a financial plan that i have stuck with.
I'm happy to say that my CP comes to an end May 2014(7 more payments) and i got a non-secured credit card from Capital one last April.
Do the CP, we will feel like a new person with the weight of the world lifted off you.
As for credit cards for work, you have  pre paid ones or the secured kind offered at a lot of banks.


Good luck
Title: Re: Not sure what to do.
Post by: RegretfullyYours on October 27, 2013, 05:47:42 PM
Your debt load and situation is eerily similar to mine.  I was about $150k too - although a ginormous amount of that was owing to CRA.  I travel a lot for work as well - often internationally - and had no idea how I'd survive without credit cards.  It does take some creative thinking, but honestly, not having the debt hanging over my head makes it so worth it.

There are a few things - prepaid cards for sure, visa debit (a godsend, as it is accepted as a credit card in more and more places, including with the airlines), asking the boss to consider providing credit cards - if you give him the research it's hard for companies to deny that this is a better option, even finding one good friend who you can hand a chunk of cash and ask them to use their card (in a pinch).  Those are some of the things I've done, and it's a bit frustrating at times, but it works.  I'm five months into my payments (18 months to go!), and I'm getting along ok without a credit card - and I've been to Hong Kong twice, Geneva and Johannesburg each once.

Most importantly, I feel so much better about life.  That horrible feeling in the pit of my stomach is gone.  I can sleep at night.  Do yourself a favour and go see a trustee - at least hear your options and think it through with someone who's an expert.  It's totally worth it, I promise!  Do it for your mental health and for your kid!
Title: Re: Not sure what to do.
Post by: Dumdum on October 28, 2013, 05:46:46 PM
Welcome aboard Jules 123!
You have already heard from two of us and now another. You can't describe the feeling when that proposal goes through. Just a 1/2 hour of your time with a trustee can sure make a difference. As for the credit cards, I have been without them for a year now and really, I don't miss them. It stops you from spending on things that you really don't need or can't afford. If one is needed for work then I'm sure you can get a secured or prepaid one. But whatever you do, don't start with them again. I'm sure if you polled anyone on the site, they would tell you that credit cards are what brought them down. Do yourself a favour, go see that trustee!
Good Luck!
Title: Re: Not sure what to do.
Post by: jules123 on November 12, 2013, 10:13:52 AM
Thank you all for your replies. They really did give me a boost that I needed.   I am so scared right now.  I know i have to do something.  My son has no idea what financial trouble I am in and he relies on me for a roof over his head, etc.   I did get a prepaid credit card and now I will have to stop paying some of my bills in order to fill the card up.  I wanted to ask you if you waited a couple of months before fiiling your CP in order to get some cash in hand beforehand and to fill up your prepaid credit card and establish another bank account etc.. And how long before they try to garnishee your salary?  I have to arrange several auto withdraws from my . bank to my new bank.   Insurance, car lease, etc.   I am thinking to file in early January and stop paying several credit cards next month.  I will continue to pay my mortgage and secured loc. 
I did go see one trustee, but he was not very nice.  Basically told me I had 2 choices, CP @950.00 a month for 5 years or bankruptcy at $1020.00(surplus) for 21 months.  Not much of a difference is it?  I told him that if I went bankrupt I would lose my car and my house and how would I work, as I need my car for work?  He said to work out something with my leasing company.  I am only 1 year into my lease, I doubt they would let me keep the car, not to mention the shame of it all.  And my house, I have maybe 20K equity when you factor in the LOC.  I need a place to live, so if the bank takes my house, what do I do?  Whose going to rent to me if I go bankrupt.  Filing the CP, I get to keep my house, but the payments are much more over the 5 year period.  It seems weird to me the closeness in the monthly amounts between CP and bankruptcy.   Anyways I am going to see another trustee to see what they say.  I look forward to your replies and opinions and once again, thank you for your support and kind words. 
Title: Re: Not sure what to do.
Post by: Stewart on November 12, 2013, 10:30:39 AM
My advice is to take the CP option, keep your house and your car, ride them out through the CP. Step up the CP payments at every opportunity and try to have it paid off before your lease comes due so you'll at least be completed before you go to buy another vehicle. If not, ask your leasing company to extend the lease for you for another year or two. If you've maintained a perfect payment history with them they shouldn't have a problem doing so at the same monthly rate.

The CP will be done in 8 years (unless you pre pay) - 5 for the payments + 3 years on your record after completion.

The BK option would be on your file for 8 3/4 years (1 3/4 for the payments + 7 years on your record after discharge)

The BK option would also make your life more difficult if you wanted/needed to file a bankruptcy again down the road where both BKs would remain on your bureau for 14 years after discharge.

Ask a couple more reputable trustees in your area (make sure they're registered trustees, do NOT go with a 'credit counsellor'!) to see what kind of payment you can arrange on the proposal then, once filed, become an expert in budgeting and living on 80-90% of your means and you'll be fine.

Once you've filed the CP, contact Capital One and TD Canada Trust to apply for a secured credit card (one, the other or even both would be just fine). You should be able to secure a card with $300-500 worth of funds (one-time) which will then be open for use and help alongside your car lease payment to show a positive payment history. Over time with a perfect payment history they'll gradually increase the limit and eventually return your security deposit to you. This will transition you off the pre-paid credit card. If possible, go with an option that has the lowest (or $0) annual fee, regardless of interest rate. Pay off the card every two weeks and you'll never pay a penny in interest.

n.b. Paying back $57,000 over a 60 month period is absolutely peanuts compared to paying back $150k over xx number of years plus interest (which could very well turn into well over $300k all said and done).
Title: Re: Not sure what to do.
Post by: jules123 on November 12, 2013, 11:53:41 AM
Thank you Stewart,

You make a lot of sense, especially with your last sentence!  I am going to make an appointment with another trustee to see what they say.  I think the hardest thing to do is to just do it!  I will let you know the outcome. 
Title: Re: Not sure what to do.
Post by: TreeFrog on November 12, 2013, 12:15:22 PM
Hi Jules,

I just wanted to weigh in with my support as well. I've just finished a five-year CP, and I can tell you that as soon as it was filed, that feeling of shame began to fade away. Stewart's advice regarding your car, house, credit rebuilding is excellent - as well as the end of his post where he mentions what a favourable arrangement CP is.

When I filed, I ended up speaking to a couple of creditors' reps on the phone (I had maintained a perfect payment history before I hit the wall, but I did get a couple of calls). When I told them about the CP, they were very cheerful and said that with so many people going bankrupt these days, their companies really appreciated it when a customer was organized and responsible enough to arrange a CP instead. That gave my spirits a real boost.

The reason the trustee's estimates of BK payment and CP payment were so similar is that the bulk of either payment is determined by your monthly surplus income.

Please do interview trustees until you find one you like. After all, you'll be dealing with them for 5 years, and it's good to be with someone who will be there to answer any questions along the way.

Best wishes,
~Wendy

Title: Re: Not sure what to do.
Post by: jules123 on November 20, 2013, 03:20:06 PM
Well I have an appointment with a trustee this afternoon.  My office thinks I am going to the dentist, wish for once I was! (haha).   When I called they were very nice on the phone and very comforting.  I thought I would re-read all your great advice that you gave me for a boost before I go! I am scared and so ashamed of myself for getting into this mess!   I finally told my son the financial problems I was having and he was so understanding and told me not to worry, it will all work out.   I have no choice but to do this.   I will let you know how it goes. 
Title: Re: Not sure what to do.
Post by: JEC on November 20, 2013, 05:17:51 PM
Good luck, Jules. I hope your visit at the 'dentist' goes well.  We all felt your shame as well at the beginning. Taking the next big step of doing something about the debt situation will start to diminish the feeling of shame you're having and start replacing it with relief and pride that you're facing your problem and doing something to resolve it. It isn't an instant change, but a gradual one that just gets better with time, believe me, and believe in yourself!!
I'm glad your son was so understanding, it's nice to have his support too!!

Keep us informed!!

JEC
Title: Re: Not sure what to do.
Post by: jules123 on November 22, 2013, 09:12:42 AM
I did it, well I will be signing the documents next week.  What a difference with this trustee.  She was so nice and supportive.  I broke down crying in her office and she really comforted me and told me it is not as bad as I think it is and they would work things out for me.  We went through everything first of how I got myself into this, then to taking a list of all my debts, assets etc.  Then to doing a budget and then she gave me my 2 options, bankruptcy or CP.  CP will be approximately $500-$600 a month for 5 years, ( a far cry from the other company that told me $950 a month!)   Bankruptcy would be $1250 for 21 months because of the surplus.   Both ways though, I would be able to keep my home as there is not much equity in it due to my line of credit tied to my mortgage which is maxed out.    I chose CP, at least I hope it shows my creditors that I am not totally relinquishing my responsibilites. 
I left her office feeling so much better.  They will confirm what day next week for the paperwork to be signed.  Now I am busy changing my direct pay of my insurance, etc.  to my new bank account.  I will keep you posted on the "dental plan"!!
Thanks again to all of you for your amazing advice and support.  Without it, I don't know what I would do. 
Jules
Title: Re: Not sure what to do.
Post by: Dumdum on November 22, 2013, 12:18:03 PM
First step is always the hardest...just keeps on getting better! ;)
Title: Re: Not sure what to do.
Post by: JEC on November 22, 2013, 09:48:58 PM
Good for you Jules. It will be a good weekend for you...lots of relief in your life,  and stress off your mind.  My Trustee was very supportive too.  You've taken the hardest step, and look how much better you feel!!  It does only get better!

Best of luck to you.

JEC
Title: Re: Not sure what to do.
Post by: jules123 on November 26, 2013, 08:38:36 AM
well just when I think it can't get any worse it does.  My trustee called me yesterday and told me that my mortgage has a clause in it where whether my debts to them are secured or not, I am responsible.  I do not read the clause in that way as it says D1, Obligations secured, there is no mention of unsecured debt.  My mortgage is with Scotia Bank.  How could they put such a clause in a mortgage?  Anyways, now he is recommending bankruptcy.  I am a mess!  I am going to see him this morning at 10:30.   I will let you know the outcome. 
Title: Re: Not sure what to do.
Post by: TreeFrog on November 26, 2013, 05:53:26 PM
Not sure what you mean, Jules,

You have mentioned your mortgage and secured LOC - which you've said you intend to keep paying.

What is it they're saying you can't clear with the CP?

As far as I know, bankruptcy clears the same debts as CP does.

Let us know what you find out. Hope you trustee is worrying you for nothing! Might be time for a third opinion.

~Wendy
Title: Re: Not sure what to do.
Post by: Dumdum on November 27, 2013, 05:13:50 PM
Something just doesn't sound right...I think maybe you misinterpreted what the trustee said. Please clarify so we can understand.
Title: Re: Not sure what to do.
Post by: Stewart on November 27, 2013, 05:26:38 PM
well just when I think it can't get any worse it does.  My trustee called me yesterday and told me that my mortgage has a clause in it where whether my debts to them are secured or not, I am responsible.  I do not read the clause in that way as it says D1, Obligations secured, there is no mention of unsecured debt.  My mortgage is with Scotia Bank.  How could they put such a clause in a mortgage?  Anyways, now he is recommending bankruptcy.  I am a mess!  I am going to see him this morning at 10:30.   I will let you know the outcome. 

Jules123;

If I'm reading this correctly, and I may be interpreting some of what you're saying, but is ScotiaBank the holder of a large portion of your unsecured debt and forcing you to pay it in full as some kind of clause within your mortgage agreement?

If that's the case, that would de-facto make them secured pieces of credit. You should clarify with your bank - a piece of credit is either secured or it's not. If it's not secured, it is entirely eligible to be included in a Consumer Proposal or Bankruptcy proceeding.

It sounds like the second trustee you've visited has looked at your situation quite differently. To have the payment drop in half sounds like a major difference and it sounds as if one or the other trustee have included or excluded some portion of your debt that they maybe shouldn't have. Obviously the mortgage and the HELOC should be excluded from a CP proceeding, and provided you pay them back perfectly you should be ok to carry on with them going forward, but all the unsecured debt you have should be legitimately fair game.

I'm with the others - if you can, and if you'd like, please provide some clarification as to what you mean so those here who've been through the experience can provide some insight.
Title: Re: Not sure what to do.
Post by: jules123 on December 01, 2013, 04:06:50 PM
When I refinanced my mortgage, they put a clause in it that any debts whether secured or unsecured with the Scotia bank are payable to them regardless of whether they are secured by the mortgage on the house.  I have 2 lines of credits with Scotia, one is unsecured and I owe 45K to it.  the other is my Scotia Visa another 5K.  My secured line of credit is up to 80K now.  They also put a clause that interest would accrue at the rate of 20%!   Therefore when I add everything up, it is about 100K more than my house is worth.  My mortgage has 1 year left to renew.  The trustee said they will never renew my mortgage and does not think anyone else would under these obligations.  And adding that to my CP, I would not be able to meet the payments.   So he said to walk away, declare bankruptcy, told me it would take them 6 months to get me out of the house and I should put my mortgage payments into another bank account so that I would have some cash to move and find a place.  He told me not to pay any credit cards either,  only the hydro, phone, insurance etc.  My bankruptcy would be for 21 months due to surplus income and my payment would be 1047.00    What does everyone think?  I don't seem to have any other choice now.  I am getting sick over all of this.  I need to make the right decision.   
Title: Re: Not sure what to do.
Post by: Stewart on December 02, 2013, 11:49:16 AM
Unfortunately your trustee is probably right. If you burn BNS for that much money in a CP or BK, there's little to no chance they'll renew your mortgage. The only possible exception would be a long, stellar payment history and a lot of equity in your home, but it doesn't sound as if that's the case.

It sounds like you need to start working on your exit strategy, pool your resources and find a place to live before everything goes south. If I were you, I'd arrange to have my belongings out of the house and into a new place (rental, etc.) before they get a chance to foreclose. It's always better if you can control your move rather than being supervised by a bailiff.

While you're doing the research for your new place to stay, I'd speak to a lawyer about that clause in your mortgage. It sounds just a little fishy to me. Check to see if it's enforceable and within their legal rights to do so.

Remember that contract law in Canada expressly forbids anyone from the ability to sign away our Charter rights. (eg; nobody can sign a contract that allows them to cause me bodily harm if I don't comply with the terms.)
Title: Re: Not sure what to do.
Post by: Dumdum on December 03, 2013, 05:08:31 PM
What about meeting with the people at Scotia bank and tell them what is going to happen if they enforce this clause? I'm sure they don't want a house on top of the debt to deal with. Ask for a renegotiation...you have nothing to lose! :(
Title: Re: Not sure what to do.
Post by: jules123 on December 04, 2013, 06:22:40 AM
Thanks everyone for your insight.  My trustee has told me it will take them at least 6 months to foreclose on my house.  He told me to stop paying the mortgage, the credit cards and the LOC's.  He told me to just pay the hydro,  insurance, phone,  and car lease and insurance. 
He told me to put the money into another bank account and plan to move by the end of April.  He said it takes 90 days before I am served papers, then another 60 days notice and finally another 30 days.  If that is correct, then that would take me to end of May. 
Do any of you know if indeed it takes 6 months or can they do it any sooner?  I live in Montreal.QC.

And yes, I have asked my trustee if I should speak with the bank first to see if they can do anything.  I am awaiting his response.    I will keep you posted. 
Title: Re: Not sure what to do.
Post by: June on December 06, 2013, 02:07:02 PM
Hi Jules,

First off I wanted to wish you strength and lots of luck as I know what you are going through and the stress must be taking a toll on you. I have met with a trustee but considering searching for a new one as I was not comfortable with them so still doing a bit of research
As I am basically in the same situation that you seem to be with Scotia I was wondering where you or your Trustee found the clause in your mortgage? Was it actually somewhere on the refinance agreement/contract?
This is something that I have to look into as well and any insite is appreciated.
Title: Re: Not sure what to do.
Post by: jules123 on December 07, 2013, 10:30:09 AM
Hi June,

the clause is under DI  Obligations Secured it reads as follows:
" The obligations secured by this hypothec consist of all of your debts, liabilities and obligations towards us, including interest resulting from the agreements ( the oblgations secured), whether;
present or future
unconditional or dependant
matured or not
at any time owing or remaining unpaid to us
which arose from dealings beteen you and us, or from any other proceedings in which we became the lender.
wherever and whether incurred by you alone or with someone else.
whether as main debt or a security for deebt
as amended from time to time
You agree to pay, according to this document and all agreements,
all amounts including but not limited to, all costs and other amounts due to us under this document or any one or more agreements.
alll interest, including compounded interest that accrues on the obligations secured
Even if we have not advanced the funds or we are even obliged to and advance the funds, this hypothec is effective from the date it is created.
It then goes on to say the following:
You further hypothec the property for an additional 20% of the amount specified in section 5A  This specifically secures payment to us of all amounts that may be owing under this doucment and not secured by the hypothec described in sections d5a and d5b of this document, such as taxes, insurance, repairs and other costs.

So in a nut shell, I am screwed!  However the trustee has agreed to file a CP and see what the bank comes back with.  If they refuse, I will go bankrupt, no choice, but maybe they will cut me a deal.  I am continuing to pay my mortgage and secured line of credit, and my utilities and insurance.  I am not paying any credit cards since last month and the calls are coming in.  Thank God for caller ID.  I turned off my answering machine!  I have a meeting with the trustee on Jan 14, to sign the papers for a CP. 
I have been banking with Scotia for 35 years, never missed a payment, mortgage etc.  Never had a nsf cheque, so I am hoping that they will take this into consideration.

My trustee also states that because this clause was not in my original mortgage, he doubts the legality of this clause.  He says he has seen this clause pop up by several banks over the past 5 years and he thinks it would not stand up to a legal challenge.  But who has the means to challenge the bank in court, when your almost bankrupt!!

I will keep you posted, until them warm wishes for a happy holiday season. 
Jules
Title: Re: Not sure what to do.
Post by: jules123 on December 15, 2013, 02:22:16 PM
I thought I would get some feedback from the group on that clause in my mortgage.  Anyone ever seen or heard of this before?   Looking forward to your insight into this.
thanks
Jules
Title: Re: Not sure what to do.
Post by: Dumdum on December 16, 2013, 10:07:31 AM
Hi Jules,
I have never seen that clause and I have seen a lot of mortgages. Whether that clause holds water in a court of law is another question. The only way to find out is to let your trustee deal with it and see what happens. You may have to get a legal opinion from a lawyer. Good luck! :)
Title: Re: Not sure what to do.
Post by: jules123 on December 16, 2013, 02:29:35 PM
Thanks for  your feedback.  Even the trustee told me it was not legal.  And I was not even there to sign the mortgage in front of the notary.  The bank had me sign a power of attorney and said the representative from Scotia Bank would sign on my behalf.  According to the trustee that is not a legal practice as well.  A notary is supposed to read all the mortgage details to the person outloud so they understand what they are signing. 
Lets see what happens in January.  But honestly, I have resigned myself to the facts that I may have to do a bankrupcy instead of a CP.  I just need to get this settled, as my nerves are shot.  I can't sleep at night, I have a hard time concentrating at work etc....
thanks again for your feedback.
Jules

Title: Re: Not sure what to do.
Post by: neversaynever on January 07, 2014, 09:31:49 PM
Hi Jules,

Have you had any resolution?  Is your situation looking up?
Title: Re: Not sure what to do.
Post by: jules123 on January 11, 2014, 10:57:49 AM
I am meeting the trustee on Tuesday to sign for a Consumer Proposal.  We are going to try this avenue first to see if the bank will cooperate with me.  If not, there will be no choice but to file for bankruptcy and they (bank) will end up with not only the debt, but the house on their hands as well.  I hope we can work out something so that I can keep the house and not file bankrupty.
One other thing that has come up is that I have a lawsuit pending and it is in my favor, I stand to receive a judgement of approximately $90K, however it won't be heard in court till this September 14 time frame.  If I go bankrupt, I have to surrender all of the judgement money to the bankruptcy court, but if I have the consumer proposal, I can pay the proposal off with the judgement funds and complete the proposal earlier than 5 years.
That is why my trustee is going to try to negotiate a consumer proposal.
I have been avoiding all the credit card company calls and I honestly can't wait for this to be filed, so that the phone calls stop. 
One question though, if anyone can answer,  along with the paperwork and statements the trustee has asked for me to bring on Tuesday,  I have to bring in $360.00 cash, as partial payment of my first months CP.  Is this normal?
They are a very reputable firm, but I was a little surprised by this. 
Title: Re: Not sure what to do.
Post by: Dumdum on January 11, 2014, 03:58:29 PM
Glad to see you are trying the CP. Hope that works out for you. As for the partial payment, very normal. We had to pay one full payment up front. I guess it is a good will gesture to show you are serious. It all goes toward your CP payment. Good luck! :)
Title: Re: Not sure what to do.
Post by: jules123 on January 18, 2014, 10:14:52 AM
Hi All,
I met with the trustee on Tuesday to sign the papers etc, however my mortgage payment was due the Thursday, I pay every 2 weeks, so he put the signing off till next Wednesday as I have an overdraft of 2K that I just keep using, so if he had filed the papers, they would of taken the deposited money for the mortgage payment as partial payment of the overdraft.  In future, I need to present them with a cheque with the comments section filled out that it is payment for my mortgage only, the same with the LOC secured by my home.
He doubts that the bank will accept the CP, but also put a clause in the CP that if they don't, then I will walk away from the house and loc. 
He told me it is 45 days that they have to wait legally, but he said he would know within a couple of weeks which way this would go. 
This has taken a huge toll on me.  I can't believe I got myself into this mess!  but I did!!   I will keep you posted on the results. 
Title: Re: Not sure what to do.
Post by: tipler on January 18, 2014, 05:48:48 PM
Hi Jules123 ,

Usually trustees have your best interest at heart. When I was in your shoes trustee gave me two options: CP or Bankruptcy.  I chose CP and having gone through that experience I wish I chose bankruptcy.  As one of the posters on this board indicated it stays slightly longer on your record than CP (only by a 1 year and a bit) but here are things to consider:
1) What if you loose your job again in the next five years while in CP. Will you be able to make those payments?
2) What if the interest rates go up and housing market deteriorates? 

In my opinion it is easier sometimes to start from 0. Think about those two questions and keep us posted.

Take care




Title: Re: Not sure what to do.
Post by: jules123 on January 19, 2014, 10:53:31 AM
Hi Tipler,

Thanks for your response and advice.  I know what you mean, what if I lose my job again.  I worry about that, but I really don't want to lose my home.  I have fixed it up so nicely and I am now renting out the basement apartment and one room upstairs, so my contribution to the mortgage is $715.00 including the mortgage insurance and my taxes.  Where in the world am I going to find an apartment for that amount? 
I went looking yesterday to see some apartments and holes where more than $715.00!!!  I can't see myself living in a dump.  I just don't know why the bank would not work with me on this, I hope they do.  Do they really want a house and all the rest of the debts on their hands?  I am so nervous about this and I know what will be will be, but I just don't know what I am going to do if I lose my home.  Also I have 2 dogs and 2 cats that are my family and I would not ever think of living without them.  Its a real mess!   Hopefully things will work out with the bank.  I will let you know when I find out.  The trustee told me that he would know within 2 weeks, even though legally they have to wait 45 days. 
Title: Re: Not sure what to do.
Post by: tipler on January 19, 2014, 10:20:08 PM
Hi Jules123,

First of all I understand that to find place for $715 that you actually like is not easy and leaving what you fixed up and got attached to is even harder. Your trustee is probably right as within a week my accounts in CP were being closed.
Scotia your biggest creditor has the big majority vote.  I can think of only one reason why they wouldn't wanna work with you and that answer is : CMHC  -  these guys cover any losses on the mortgage vs what the house is recovered for.
Most likely bank made you get insurance through Canada Mortgage Housing Corporation as they do to anyone with less than 20% downpayment.  I live in BC and province to province laws differ but my trustee had added all the counseling session costs and administrative costs to the whole CP and asked me to bring post dated cheques for each month. There was no money paid upfront.  Hope it helps, keep your head up and keep us posted.
Take care Jules123
Title: Re: Not sure what to do.
Post by: jules123 on January 21, 2014, 08:42:15 PM
My home is NOT CMHC insured.  It is my mortgage.
Title: Re: Not sure what to do.
Post by: Stewart on January 22, 2014, 12:49:05 PM
My home is NOT CMHC insured.  It is my mortgage.

No, your home wouldn't be secured by CMHC, but if you had less than 20% down and entered into a "high ratio mortgage", the mortgage itself would be both approved and insured by either CMHC or Genworth. That insurance protects the lender in the case of a default / power of sale and ensures they get all their money.

If you put more than 20% down and as a result have that much equity in your home, it's an entirely different situation you're in.
Title: Re: Not sure what to do.
Post by: jules123 on January 25, 2014, 10:16:33 AM
My home is NOT CMHC insured.  It is my mortgage.

No, your home wouldn't be secured by CMHC, but if you had less than 20% down and entered into a "high ratio mortgage", the mortgage itself would be both approved and insured by either CMHC or Genworth. That insurance protects the lender in the case of a default / power of sale and ensures they get all their money.

If you put more than 20% down and as a result have that much equity in your home, it's an entirely different situation you're in.
   I did put 30% down on the mortgage and it is not CMHC insured.  The problem is the line of credit attached to the mortgage, the home equity loc.  Adding that in, there is little equity in the house.  They opened it up to the value of the house so I had access to 100% value not the 80% that is usually used.  Right now, there is no way the bank would recover these amounts if they took over the house.   I signed the papers for the CP last week, so I now just wait.  My trustee said he should know within 2 weeks, but we still have to wait the full 45 days and then another 21 days.  He said if the bank doesn't agree to put the loc into the CP, then I walk away from the house.  But it will take them 6 months to take possession of the house.  (Quebec).  So that would bring me to September to abandon the house.  I am hoping that my 35 years with the bank and a stellar payment history will pursuade them to work with me on this.  I really hope they do.
Jules
Title: Re: Not sure what to do.
Post by: TreeFrog on January 25, 2014, 12:05:23 PM
Hi Jules,

I know how much you don't want to give up your house, and I hope the CP goes through. As you have said, it really would be in the bank's best interests to accept the CP; however, sometimes it's hard to figure out why banks act the way they do.

I has occurred to me that Quebec is one of the provinces where a lender must go through a judicial process to foreclose on a home. This is as opposed to provinces like Ontario, where foreclosure is done by "Power of Sale," the provisions of which are included in the mortgage contract and where the court is hardly involved.

From what I understand, in Quebec the bank must initiate a lawsuit against you to reclaim the home. If you respond to the court documents that will be sent to you before any hearing, you can appear at the hearing and reason with the judge, instead of with the bank. Your 35 years of history with the bank and perfect payment history of the mortgage, combined with demonstrated ability to keep on paying, is what would count here. It would also be important to stress that this is not just a house, it is your only HOME, and you have invested in it financially and emotionally.

This is where that strange clause in your mortgage that seems to make your LOC "unsecured" could be undone. It was put there to bully you, in the hopes that you wouldn't realize you can challenge it.

Quebec has maintained this judicial process for foreclosure in order to prevent the banks from having too much power over people's homes.

If you can possibly pay for a short consultation, it might be worthwhile to talk to an insolvency lawyer about this. They will have all the details, and will know more about whether that strange mortgage clause could hold water. I bet it can't, and I hope you will be able to fight it.

Best wishes,
~Wendy
Title: Re: Not sure what to do.
Post by: jules123 on January 26, 2014, 11:34:56 AM
Hi Wendy,
Thank you for your reply and your input.  My trustee did tell me that the clause would not hold water in court, so I think if it comes to that, I will see what I can do.  He also advised me to speak with a lawyer on this clause, especially since I was not at the notaries when the mortgage was signed.  I signed a power of attorney at the bank,as my bank manager said it was a convenience that they offered their good clients. Also being with them for 35 years, the last thing I thought was that they would try to screw me, boy, was I naive!!  :o Hopefully things will work out, I have to be positive.  This is my home, not just a house as you put so eloquently!   and you are absolutely spot on,  it is my home.
I will keep everyone posted.  Thanks again for your reply.
Jules
Title: Re: Not sure what to do.
Post by: jules123 on February 09, 2014, 11:00:06 AM
update,  I spoke with my trustee and he said that the majority of my creditors have accepted the proposal.  However the bank has yet to respond.  Also what I find odd or disturbing is that the bank continues to calculate interest on the debt and from my understanding once a CP is filed, interest stops being calculated immediately.   This is not giving me a good feeling that the bank is going to accept the CP.  We have to wait till mid march for the 45 days anyways, but what do you suspect the bank will do?  I am continuing to pay the mortgage and the LOC that is secured by the mortgage.  I am not paying the Visa or the other LOC which was unsecured, however that clause in my mortgage seems to state otherwise. 
Please let me know your thoughts.  Thanks in advance
Jules
Title: Re: Not sure what to do.
Post by: TreeFrog on February 09, 2014, 03:15:33 PM
Hi Jules,

When I filed my CP, most creditors stopped calculating interest and sending statements immediately. However, a couple of accounts continued to do so for a few months, even though the CP had been accepted. In the end, I was still getting statements from one MasterCard well into the first year. I contacted my trustee about that one, and the mail stopped.

Similarly on my credit report, which I looked at a couple of times through my proposal, I saw that interest was still being calculated on some of the balances. Some places just don't shut down the accounts until the CP is complete.

So, it doesn't mean anything that your debt with the bank is still appearing to accrue interest.

From what I understand, with CP, "no response" from a creditor is considered a yes (unless no one responds). If the majority (in dollars) of those who respond, respond in favour, then you're good.

Best wishes,
~Wendy
Title: Re: Not sure what to do.
Post by: jules123 on March 08, 2014, 11:20:06 AM
Hi All,
My trustee called me and I have a meeting Monday morning with him.  He did not say anthing, so I asked him what was going on.  His response was "it's not that bad", but said he would explain everything on Monday.  I have been paying my mortgage and secured line of credit on the house, but the bank has still not stopped charging interest on the visa, and other line of credit I have.  They shut down my  checking account and I got a final statement last week with the write off of the overdraft owing on the account.
I am very nervous about all of this, I wish he would of told me on the phone what was going on.   I will let everyone know the outcome on Monday.  The 45 days are up Monday! 
Jules
Title: Re: Not sure what to do.
Post by: TreeFrog on March 08, 2014, 08:57:37 PM
Hi Jules,

Thanks for the update. I think your trustee's "it's not that bad" is a good sign, considering what you were up against. Perhaps there has simply been a counter-proposal asking for a bit higher payment. In any case, I can understand why he didn't want to discuss the whole thing on the phone - it could make for a long phone call.

Let us know how it goes. At least you only have to wait two days to see him.  :)

~Wendy
Title: Re: Not sure what to do.
Post by: jules123 on March 15, 2014, 10:03:13 AM
Hi,  My proposal was accepted.  The majority of creditors voted yes, only the Scotia Bank voted no, and some did not vote at all, which means they are accepted.  My trustee received a letter from the Scotia Bank indicating that he must remove a certain clause in the proposal, which he said they just did not understand it.  It had to do with the bank having to accept that the unsecured debt was indeed unsecured no matter what clause they snuck into my mortgage documents.    So I keep my house, continue to pay the mortgage and the secured LOC, but everything else owed to the Scotia is part of the proposal.   I have to go see him at the end of the month to sign the documents, give a voided cheque and pay the balance of what is owed for the first month payment. 
To be honest, I thought I would feel much better than I do.  I am really stretched to the limit in my budget and have no extra cash for anything.   On top of this,  I have a law suit pending that I need to pay my lawyer and have no idea how I am going to do this.  The upside to the lawsuit is I stand to receive a substantial amount of money from it, which I will use to pay off the consumer proposal, but in the meantime, as my title says, ...not sure what to do!   
Once again I want to thank everyone for their input and support throughout this.   
Title: Re: Not sure what to do.
Post by: TreeFrog on March 15, 2014, 06:49:10 PM
Yay!   :)  That's great news that the proposal was accepted.

You've been through a lot of uncertainty with this, and there are still things to take care of as you say, but this is a very big step.

In short, although you may still be in the thick of things, they are not nearly as thick as they were before.  :)

Best wishes and congratulations on getting this rolling,
~Wendy
Title: Re: Not sure what to do.
Post by: JEC on March 15, 2014, 10:05:37 PM
Congratulations Jules for having the Proposal accepted. At least it's a start in the right direction.

You still have issues to deal with....but at least one big issue is behind you. Try to take each problem just one at a time...try not to think about them for 10 minutes a day. You can only do so much and you've taken a huge step with filing the proposal and getting it going. Perhaps set some priorities. Your Proposal is so important right now....you don't want to sabotage its success. The lawyer just might have to wait for his/her money and if you're going to win...then hopefully he/she won't mind waiting....

Dwell on the success of the Proposal...it's gone through, it's a good thing, it will make your life so much more stress-free.

Good Luck and again, congratulations!!

JEC
Title: Re: Not sure what to do.
Post by: jules123 on March 23, 2014, 10:43:44 AM
Hi All,
As I told you the consumer proposal was accepted, however I have to go and sign the papers on the 31st of the month.  I received a notice from the trustee that was a notice to all my creditors of a meeting on that date??  My trustee says it is just a formality and no one will show up.
On another note, I do not owe any money to Revenue Quebec, in fact they owe me a refund.  My trustee included them in the list even though I don't owe them money.  Now it is on file at Revenue Quebec.  I emailed my trustee to find out why he included them when I don't owe them any money. 
I have had no response yet.  Now I have no idea what will happen to my refund.  Will I get it? or will they give it to the trustee for part payment of the CP?  I don't think this is right, I did not file bankruptcy. 
Jules
Title: Re: Not sure what to do.
Post by: NotATrust-E on March 24, 2014, 11:11:57 AM
It's unusual that your trustee didn't know about the meeting. Either there's a meeting OR your proposal has been accepted. The meeting is there to give your creditors the opportunity to accept or reject your proposal.

By law, the trustee is required to advise CRA (and I assume Revenue Quebec and any other provincial taxation authority.) It's a common practice to include them as creditors because that's an easy way of making the notification.

Unless your proposal specifically stated that your refund will go into your proposal, the refund is yours; it does NOT vest in the trustee.


Hi All,
As I told you the consumer proposal was accepted, however I have to go and sign the papers on the 31st of the month.  I received a notice from the trustee that was a notice to all my creditors of a meeting on that date??  My trustee says it is just a formality and no one will show up.
On another note, I do not owe any money to Revenue Quebec, in fact they owe me a refund.  My trustee included them in the list even though I don't owe them money.  Now it is on file at Revenue Quebec.  I emailed my trustee to find out why he included them when I don't owe them any money. 
I have had no response yet.  Now I have no idea what will happen to my refund.  Will I get it? or will they give it to the trustee for part payment of the CP?  I don't think this is right, I did not file bankruptcy. 
Jules
Title: Re: Not sure what to do.
Post by: drowningindebt on March 24, 2014, 08:07:28 PM
Our trustee told us that it is very common for creditors to request a meeting, however they very rarely show up (unless it's a local credit union, etc.).  My understanding is that even though a meeting has been called, if that creditor does not have more than 50% of the vote, the outcome of the meeting really doesn't matter anyways as the proposal is automatically accepted if more than 50% accept it. 

My husband and I filed a joint proposal (still awaiting approval), and Revenue Canada was included in the proposal.  Our taxes were not yet filed at the time the proposal was filed, however I estimated my husband would owe approximately $2800 while I would get a refund of approximately $800.  In the proposal, the trustee included Revenue Canada with an estimated debt of $2800.  We have since filed our taxes and I received my $800 refund, which surprised me.  I assumed they would keep my refund and put it towards my husband's tax debt.  When I asked my trustee about it, he assured me I could keep the refund, since a refund is a totally separate thing, and I was entitled to keep it!
Title: Re: Not sure what to do.
Post by: NotATrust-E on March 25, 2014, 08:05:00 PM
There are two parts to this.  Any creditor can request a Meeting of Creditors before the 45 days are up. RBC and CRA are notorious for this. However, for the meeting to actually happen, the creditor or creditors must have at least 25% of the proven claims.

Our trustee told us that it is very common for creditors to request a meeting, however they very rarely show up (unless it's a local credit union, etc.).  My understanding is that even though a meeting has been called, if that creditor does not have more than 50% of the vote, the outcome of the meeting really doesn't matter anyways as the proposal is automatically accepted if more than 50% accept it. 
Title: Re: Not sure what to do.
Post by: jules123 on March 31, 2014, 07:42:48 PM
I signed the papers for my CP today and got a nasty surprise.  The Scotia Bank is still not releasing the so-called secured debts ( the clause they put in my mortgage without my knowledge, I explained several threads ago.)  They are continuing to add interest each month to my unsecured loc, visa and rrsp loan.  However what is strange is they zeroed out my overdraft in my checking account and closed the account.  If this is supposed to be secured by the clause in my mortgage, why did they do this then? 
Also, the trustee doubts they will renew my mortgage in march of 2015 and says they will not release title unless the above is paid.  So trying to get another mortgage will be impossible. So in essence I am paying twice to the bank for these so-called secured debts.  Once with the CP and again when I sell the house be in next year or 10 years from now, ( if they renew my mortgage).   The trustee advises me that once I get my settlement from the law suit I have before the courts, to pay off the CP then go bankrupt??? 
Everyone said they felt like a weight was lifted off their shoulders once they signed their CP, well I feel like a hammer is coming down on my head.  I just can't believe this.  Even once I get the settlement and pay off the CP, there will be little left and somehow I think I should of taken the advise of someone who responded to me a little ways back, that I should just go bankrupt.  It will take years to get off my credit report at this rate.   
Very upset over this whole thing.   :(
Title: Re: Not sure what to do.
Post by: TreeFrog on March 31, 2014, 09:35:09 PM
Hi Jules,

Sorry it continues to be so complicated. Since ScotiaBank is still insisting on going by clauses that may not stand up in court if challenged, do you think you could afford to see an insolvency lawyer about all this? Trustees really don't have enough education or knowledge (most of them, anyway) to deal with complicated situations like this.

You might at least be able to get an opinion at low cost - and with your settlement coming eventually, payment could probably be deferred until you get that settlement.

Hope things ease up soon. It looks like you could really benefit from a lawyer's opinion - one who specializes in insolvency. ScotiaBank may have to cease taking advantage of you. They expect you and your trustee just to accept what they do and not seek expert legal advice. This make me mad, too!

Best wishes,
~Wendy
Title: Re: Not sure what to do.
Post by: Dumdum on April 01, 2014, 12:03:51 PM
Hi Jules,
Seems to me that Scotia Bank is just trying to play hardball. As Wendy mentioned, go see a lawyer. I doubt if the clause will hold up in court and that is what it may take. Banks are continually changing things and then getting you to sign without divulging the change made. Good luck!
Title: Re: Not sure what to do.
Post by: tipler on April 03, 2014, 12:44:44 AM
Hi Jules123,

I was the one that said its sometimes easier to start from 0.

Now with those debts not being discharged are you still solvent? because in CP if you miss more than 2 payments in a row than you are usually in default and your CP becomes void.  I would take the suggestion of the Wendy and Treefog and see insolvency/bankruptcy layer. Although I sympathize with your situation I think it will cost a lot of money to take scotia to court and, to see an outcome that could take even longer.  What do you think?
Title: Re: Not sure what to do.
Post by: jules123 on April 05, 2014, 01:10:41 PM
Hi Tipler,
Yes  you were right, however the only reason I went this way is because I should receive a large settlement from a lawsuit I have pending.  The problem is I have to continue to pay my lawyer and now with having to pay the CP, my mortgage, my LOC associated with my mortgage, car lease, utilities and groceries, there is a big fat Zero left.  I am really annoyed at my trustee, he did not tell me that Scotia would not release those debts, he told me that they did not understand the document the way it was written so he would clarify that point to them.  The when I go there for the appointment, he says he told me that at the last meeting that they would not release the debts as unsecured.  Which is not true.   I have left him a message to call me and he says he will call me on Monday, not that anything is going to change!   In one way I just want to say to heck with it all and go bankrupt, but I have already paid the lawyer thousands of dollars to sue, and if I walk away now, the person I am suing walks away scott free and I lose all the money I spent on the lawsuit.  My lawyer says I have a 100% chance of winning.  I don't want to go into details of  the lawsuit, but I know I will win.  But... there is no more money to pay him.  Going to see an insolvency lawyer is great, but I can't pay him either!   . I make good money have a good job now, but I can hardly make ends meet even with the CP.    I am going to try to make things work until I get to court and win the settlement, that is providing I can figure out how to pay the lawyer until then.  I still believe my trustee should act on my behalf and speak with the bank.  He told me he never did, he spoke with some intermediary for the bank and actually did not even speak, but exchanged emails.  Seems like something was not done properly.  And when I signed last week, I felt rushed into signing and there was a coldness about the trustee then, like he wanted to just get this thing signed and wash his hands to it. 
Title: Re: Not sure what to do.
Post by: TreeFrog on April 05, 2014, 03:16:46 PM
Hi Jules,

If you believe your trustee did not deal with you honestly, and rushed you into signing, you should contact the Office of the Superintendent of Bankruptcy. I don't know if there's a "cooling off period" for CPs, as there are with some other contracts, but they may be able to help you.

Best wishes,
~Wendy
Title: Re: Not sure what to do.
Post by: tipler on April 07, 2014, 12:37:47 AM
Hi Jules123 ,

I understand that you might come into money. I know you might win a settlement.  I'm not sure what the situation is or particulars of the case, however even if you win collecting is another story! ( at least in BC). Even if you win the person might appeal the judgment and or take years to pay. People do not part easy with money. Appeals and chasing people for money is another story. Also in BC unless the case involves personal injury people can go bankrupt too, so please have that in mind. Let us know how it goes with your trustee on monday.

Puzni
Title: Re: Not sure what to do.
Post by: jules123 on May 31, 2014, 09:49:54 AM
Hi All,
I am 2 months into paying my CP and I am so broke it is not even funny!  I just got paid and I have $45.00 left after paying mortgage and secured LOC and car payment until 2 weeks from now when my next pay comes in.  My son keeps telling me he will pay his rent, but never does and it just is not working.  I really don't want to go bankrupt, as not only will I lose the house, but also lose any settlement I will get from my lawsuit.  By the way, the settlement conference has been pushed to December from August, so I will have to wait even longer to see what $$$'s will be awarded to me.  I am not worried that the defendant will try to appeal the decision, in fact we are going to a settlement conference as he would not want this in the court as it would be public knowledge and would ruin his reputation. The court date is scheduled for early Jan 2015.    All I can say is that he is a doctor and he knows what he did was unethical and illegal.    I am trying to hold out until then.  I know i will get at least enough to pay off my CP and the lawyer. 
I am thinking of getting a second job just to survive, but I work a full week, travel 3 out of 4 weeks and am exhausted by the time the weekend comes, but I have no choice.  I am going to look at a part time waitress job on the weekend, or at the very try to find one.  Just will be really embarrassed if any of my customers or fellow employees come to the restaurant, but you have to do what you have to do.  And honestly, I am past caring about what others think, but when it is your customer, well that can be a little akward Hopefully I wont have to do this for very long and I win the lawsuit and get my settlement and move on.   So that is my update,  not a very happy story,  I hear all these people saying how they can finally live their life and has some extra money to do things,  in my case, not so much...  I just hope I can hold on till the end of the year.
Title: Re: Not sure what to do.
Post by: internalaudit on June 01, 2014, 08:01:16 PM
Hmmm.  Hoping your son gives you some loan if he is not willing to pay rent to tide you over until that settlement conference.  Usually, people who file CP will have leftover money, but I guess the surplus income calculated in your case is significant, having read in one of your earliest pots that you make very good income.  I also read how Scotia kind of screwed you up with that LOC.

Just hang in there.  In my case, I intended to file C/P late 2011 but we have been able to dwindle down our obligations to lower interest loans (1.99-12%, average interest I'm guessing in the 6.5%) and did not want to file C/P while our income wer still way above median (about 85-90k/year each).  I'll wait and see if either or both of us get fired and we'll pick up a minimum wage job and then file for C/P if we cannot cope with our debt load.  The reason we are able to pay down is that we owe relatives a significant amount as well and no interest have to be paid on them.  Another reason we had not file for CP was that we owed so many creditors that we will not be able to borrow from most shops if we had filed for CP.   That would have left us with BMO and Scotia among the big 5.  I also work for one of the other big bank but things aren't going well in the workplace (crappy management and feedback evaluation process) but I'll wait for a severance package if they to terminate me.

That seems to be the best strategy for us at least for now.

If you are sure you will win the case and can use the settlement to repay your CP, then you will just have to ask your son, or some close friends/confidant for some financial assistance if in case you need some.  You can always work a little further from your workplace so that friends/customers don't bump into you.