Should I pay off car loan with line of credit?
I owe $8000 on an existing car loan and $60,000 on a line of credit. Should I use the line of credit to pay off the car loan prior to filing a consumer proposal? In essence, making the $8k unsecured.
The loan and line of credit are with the same bank.
It would be fraudulent because you propose paying off a vehicle loan over which the bank has security with a line of credit for which they have no security.
Thus you would be leaving the bank with $68,000 in unsecured debt instead of $60,000, while rewarding yourself with a free and clear vehicle with a value of $8,000.