I owe approx. $95000.00 and my monthly payments are out of reach. The only secured part of this debt is a $15000 car loan that is only worth $10000 to sell and a $23000 holiday trailer loan that is only worth $17000. I can't sell them because the leftover debt is $11000 that they will want paid out before releasing the liens. I am concidering a proposal and turning both of those in, I assume it will have to be the Division 1 proposal because I owe over $75000. I was wondering what the difference between this propsal and the regular proposal is. Also, While in a proposal do you have to report income and expenses monthly like in a bankruptcy and during the proposal can I save up and assume a mortgage if the bank won't approve me for a mortgage?

In both a bankruptcy and a proposal you can turn in the car and trailer and the deficiency will be part of the process. In simple terms, the difference between a consumer and Division 1 proposal is the Division 1 results in an automatic bankruptcy if not accepted by creditors. The Trustee can explain all the other differences when you discuss your options. There is usually no requirement to file income and expense statements in a proposal. You are also able to save for a house.

Ann Clarke
phone: (403) 296-2972
aclarke@alger.ca