We would like to do a consumer prososal. One year ago, we purchased a home using almost all of our RRSPs in the home buyers plan. In this deal, we needed an additional 35,000 to complete the deal. The previous owner took out a 2nd mortgage and lent us the 35,000 on a 15 year term. She has a lean on the house, and she was hoping that we would be able to pay her back within a year's time. Even though our credit history is good, no bank will lend us the 35,000 to pay her off due to our high debt ratio. No bank will consolidate our debts, again due to our high debt ratio. The fact that we have been making all payments on time made no difference. The banks rules are black and white, they make no sense, but the rules are the rules. My question is, are we elegible to make a consumer proposal being as one year has passed, and if so, will it affect the deal that we made with the previous owner? Will she be able to claim the house?

If the vendor has a lien on the house, presumably a caveat or second mortgage, she is in the same position as the first mortgage holder and you must continue to pay her. A consumer proposal may be an option for you to deal with the unsecured debts. I'd suggest you come in for a free consultation to discuss your options. We can be reached at 310-8888 in Alberta.

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