Bankruptcy Question & Answer Forum - Canada

Author:		Catherine
Date:		May 14, 2005
Question:		I need to declare bankruptcy for $60,000 in business debts. I have recently had an inquiry to maybe sell my business - I am asking for $60,000. However, I am wondering if it is worthwhile to push for the full amount and risk losing the sale - or accept the best offer and make a consumer propersal to my creditors? I currently own a house & adjoining piece of land valued at $160,000 together, but I have a mortage of $20,000 on the land & $135,000 on the house - because I renegociated the mortage a year ago to pay down some of my debts. I have no other assets of value. I am up-to-date on my mortgages and wish to keep both - would any of the proceeds go towards these mortages? Would I be allowed to keep any of the proceeds of the hopeful sale of my business, or will I have to give all to my creditors??
From:		Ann Clarke, Alger & Associates Inc.
Date:		May 17, 2005
Answer:		It is difficult to know whether another buyer may be available so sometimes it can be better to take an offer if it is reasonable. If you do a consumer proposal the sale proceeds could not be used to pay the mortgages as they are secured debts. The terms for the proposal and keeping a portion of the sale proceeds is something you should discuss directly with the Trustee. Ann Clarke phone: (403) 296-2972 aclarke@alger.ca