Question: I have recently filed a consumer proposal and went for my two counselling sessions during which I learned that I was $450.00 short income each month. I have listed my house for sale and am in arrears with the bank for 4,444 plus now I have 3,500 bank fees on top. I was told by friend to vacate my house–but how does this help. I am drowning and can’t get out— is vacating an appropriate option and where/how can I rent with a proposal and potential vacating?–please help–I am desperate.
Answer: You should immediately contact your trustee and ask for a meeting to review your options. If your cash flow is short by $450 each month, your proposal is not viable; you will get behind on your payments, and it will fail.
The first option is to either increase your income or reduce your expenses to eliminate your cash shortfall each month. If you can do that, it’s possible that you can continue with the proposal.
If you vacate your house to save money, and there is a shortfall, you will probably be liable for the shortfall, since the shortfall has arisen after you started your proposal. If you intended to surrender your house, you should have vacated and stopped making payments prior to filing your proposal.
If you can’t afford to keep the house, and if you can’t afford your proposal payments, your only other option may be personal bankruptcy in Ontario. Again, you should either contact your existing trustee, or if you are not satisfied with the advice they have given you contact another Ontario bankruptcy trustee for a second opinion.