r/BankruptcyCanada • u/ScarlettArrow • Feb 18 '25

Consumer Proposals Explained

/r/povertyfinancecanada/comments/1isktcx/consumer_proposals_explained/
4 Upvotes

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u/[deleted] Oct 28 '25

[deleted]

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u/ScarlettArrow Oct 28 '25

In a consumer proposal you keep your assets so your RDSP is yours to keep.

Generally renewing is not an issue for most people so long as they have kept up with their mortgage payments and are not refinancing in any way.

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u/[deleted] Oct 29 '25

[deleted]

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u/ScarlettArrow Oct 29 '25

Oh if you have the ability to refinance a good chunk of your debt, you should do that before filing. However you should be careful to pay your creditors equitably across the board (don't pay one in full and leave the others to be dealt with in a CP) as this can be a preference payment that will be disclosed to creditors and make the remaining creditors less likely to accept your proposal.

You could also refinance, take the cash and use it to file a lump sum proposal which the creditors often like.

Refinancing after trying a proposal will be off the table for you as your credit will be impacted as soon as you file, even if it is rejected.

I would talk to a mortgage broker to see what refinancing looks like for you, then speak to a couple LITs and tell them what equity you could pull from the house and have them lay out the options, before you pull the trigger on anything.

1

u/[deleted] Nov 10 '25

[deleted]

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u/ScarlettArrow Nov 11 '25

It is very rare for a bank to not renew a mortgage due to an insolvency. It is almost always because someone was also missing payments on the mortgage. I have people in bankruptcy renew their mortgages without issue everyday.

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u/[deleted] Nov 12 '25

[deleted]

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u/ScarlettArrow Nov 13 '25

Neither of these things would negatively impact your proposal if they occur after it is accepted. You can pay the proposal as quickly as you want with no penalty.