Susan and Bob: Standing Together, Consumer Proposal in Pickering

Table of Contents

Dealing with Disaster

Life had been good to Susan and Bob (not their real names). They had successful carers, three wonderful grown children and a lovely home in Pickering.

And then, it all changed.

At 53 Bob was in a car accident that resulted in a serious spinal injury – requiring extended hospitalization, multiple surgeries and years of therapy.

While Susan was initially able to take time off from work to be with Bob, eventually she had to give up her job and focus full-time on Bob’s recovery.

Bob had insurance, but it was not sufficient to cover all their costs. As a result, during the first 3 years following the accident – they used up their savings, cashed in their RRSPs, took out a second mortgage, ran up an unsecured line of credit, and maxed out their credit cards.

Their adult children stepped in and began paying their mortgages. While Bob and Susan were grateful, they hated being a burden to their children.

Even with the mortgages being paid by the children, Susan and Bob were unable to keep the credit card payments current. They began receiving collection calls that added stress to their already stressful lives – so they decided to see if they should file for bankruptcy.

All three of their children expressed concern over their parents loosing their home (even though there was no equity left in it), and were deeply worried about how declaring bankruptcy would affect their parents’ self esteem. They made it very clear to Bob and Susan that they were able and willing to continue paying the mortgages for as long as it took.

Susan and Bob set up an appointment at David Sklar & Associates to explore their options.

*** ***

They met with Jackie Stanley, an experienced and caring Estate Administrator, who reviewed their finances and options. Bob and Susan were delighted to discover that they might be able to file a consumer proposal, which, if accepted, would stop the collection calls, enable them to keep their home (as long as the mortgage payments continued to be paid), pay off a portion of their unsecured debt – and avoid bankruptcy.

At the time of the meeting they had no assets beyond the basic exemptions, had a monthly net income of $2,000 from insurance, and had the following unsecured debt:

Credit Cards: $41,850
Line of Credit: $21,500
Total Unsecured Debts: $63,350

They reviewed their options with the trustee and decided to make a consumer proposal to their creditors. They offered to repay a portion of their $63,000 of unsecured debt in 60 monthly payments of $335. Their offer was accepted by their unsecured creditors.

One year into their consumer proposal, Susan was able to return to work and take over the mortgages payments from their children. Bob eventually found part-time work that enabled them to speed up the repayment of the proposal.

Being able to avoid bankruptcy and stop the collection calls, made a major difference to both Susan’s and Bob’s ability to cope and get on with their lives.

To protect our clients’ privacy, aspects of this case study have been altered

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