Past Inheritance and a Consumer Proposal
Question: I’m about to file an application for a consumer proposal and in looking at the application noticed that you have to state any lump sums you have received in the past five years. I received a lump sum of 10,000 about four years ago. At the time I didn’t have a lot of debt and obviously don’t have any of that money left but instead, through circumstances and less than frugal spending habits, I have amassed a substantial debt ($18,000).
My question is how does the disclosure of past money received affect the creditors decision when determining a payment plan within a consumer proposal? Do they ‘penalize’ one in any way and is there a chance that they may not accept a proposal at all and therefore would result in me having to file bankruptcy?
Any insight would be much appreciated, thanks.
Answer: It is doubtful that an event four years ago will have any impact on your proposal today. In addition, since four years ago you were not insolvent, it is even less of an issue. Your proposal administrator or trustee can provide you with more details.