Question:This is my first time filing for either proposal/bankruptcy
- have a total unsecured debt of $70,000 (between husband/wife)
- has mortgage balance of $296,000
- house valued at $304,000
- car loan of $38,000
- vehicle valued at $28,000
- net monthly income is $5300 (joint)
- utility/bills total is $4800
questions:
1. will we be able to keep both our house and car?
2. how much would we have to pay a creditors for in a proposal/bankruptcy?
3.how long will we be in a proposal/bankruptcy?
thank you
Answer: Yes, in a consumer proposal you are permitted to keep all of your assets. In a bankruptcy you can keep your car and house, because in your case they have minimal or no equity (meaning if you sold them, and paid off the loan/mortgage and costs to sell, there would likely be nothing left over). However, if you keep your house and car you are required to continue making the mortgage and loan payments, so you will need to decide if your cash flow can support that. More to the point, if your car loan is $38,000 and the vehicle is only worth $28,000, it may not make sense to continue with the loan.
The cost of a proposal or bankruptcy is based on a number of factors, including your surplus income, which is based on your family size. The proposal payment is also influenced by the nature of your creditors. In simple terms a proposal for $70,000 in debt would probably be somewhere in the range of $25,000 (say $500 per month for 50 months), but that is just a ballpark figure.
We suggest you contact a Winnipeg bankruptcy trustee and consumer proposal administrator to review your specific situation and give you a more detailed answer.
