Proposal to Creditors – FAQs

Can filing a Proposal stop garnishment of my wages?

Yes, filing a Consumer Proposal will stop garnishments, with the exception of garnishments for child and spousal support.

Upon filing, we will immediately inform all garnishing creditors.

When will creditors stop collection calls?

Within five days of filing your Proposal, the Licensed Insolvency Trustee or Administrator will mail the Proposal to your creditors. Collection calls from creditors should stop once they are notified of your Proposal.

Can I keep my home? What about my car?

The filing of a Proposal allows you to retain control of your assets subject to the rights of creditors that have registered security against any of your assets.

If I file a Proposal will my spouse be obligated to pay my debts?

Unless your spouse has guaranteed or co-signed any of your debts, they are not obligated to pay any of your debts.

What does a Consumer Proposal cost?

We will work with you to arrange a payment plan that is fair and within your budget. The Trustee’s fees are calculated in accordance with the Bankruptcy and Insolvency Act (BIA), and are paid from the payments that you make to us under the terms of your proposal.

Can personal income tax debts be included in a Proposal?

Yes, all debts, including personal income debt, as at the date of filing your Proposal, are included in your Proposal.

How long can a Proposal last for?

The maximum term of the Consumer Proposal is 5 years.

The term of a Division I Proposal can exceed 5 years.

A Proposal can be a lump sum payment, payments over a period of time, or a combination of both. If your circumstances change for the better, you can prepay your Proposal in full at any time.

What happens if my creditors don’t accept my Consumer Proposal?

You are in no worse position than you were before filing. You are not bankrupt, but may still consider filing for Bankruptcy if you think that it is the best option for you at that time.

What happens to my credit rating?

The filing of your Proposal will be on your creditor report for 3 years after you have complied with its terms.

Can I keep my credit cards?

In a Proposal, you are not required to surrender your credit cards to the Licensed Insolvency Trustee; however, most debtors surrender them to the Licensed Insolvency Trustee as creditors will usually not allow them to be used.

Is the Licensed Insolvency Trustee my lawyer?

No, Licensed Insolvency Trustees are not lawyers. We are impartial officers of the Court with a duty to administer the Bankruptcy and Proposal system fairly and honestly. We are regulated by the Office of the Superintendent of Bankruptcy.

Are my discussions with my Licensed Insolvency Trustee confidential?

Yes, Under the Personal Information Protection Act (PIPA), we cannnot discuss any information that you have provided to us with any third party before you file a Proposal.

Upon filing, we will ask you to give us the authority to speak with creditors on your behalf.