Bankruptcy Question & Answer Forum - Canada

Author:		Rob
Date:		May 3, 2005
Question:		My wife and I would like to do a consumer proposal. We owe about 60,000 in credit card debt and have a high debt ratio. The problem is, we assumed a mortgage last year. Our mortgage term is up in the summer of 2006. We have a 2nd mortgage of about 35,000. We would like to consolidate this into the first mortgage. My understanding is that under a consumer proposal, one can't enter into any new contracts until the proposal is finished. If we do a consumer proposal, will it cause a problem with our attempts to consolidate the 2 mortgages?
From:		Ann Clarke, Alger & Associates Inc.
Date:		May 3, 2005
Answer:		While under a consumer proposal, there is nothing to stop you from entering into any new contracts provided the creditor knows that you are under the proposal and is willing to work with you. Some creditors, however, are reluctant to refinance secured debt while the debtor is under a proposal. I'd suggest you ask the bank directly regarding their policy. Ann Clarke phone: (403) 296-2972 aclarke@alger.ca