A Consumer Proposal is one of your options to deal with your debt without going bankrupt. Our team can help you understand if you can deal with your debt by filing a Consumer Proposal or a Division I Proposal.
Only a Licensed Insolvency Trustee can help you prepare a Proposal that is legally binding on your creditors.
What is a Consumer Proposal?
A Consumer Proposal is an option if you lack the resources to meet all of your debt obligations as they ordinarily become due, but have the means to offer a reduced amount either in a lump sum payment or over a period of time.
The main difference between a Bankruptcy and a Proposal is that in a Proposal, you remain in possession of your assets and control of your financial affairs.
Filing a Consumer Proposal will provide you with immediate protection from your creditors. Collection calls, most garnishments, and legal proceedings will stop with certain exceptions. Creditors holding security over specific assets (i.e., mortgages, car loans) will continue to require payment from you in accordance with the specific loan agreement, or they may take steps to realize on their security.
How to make a Proposal to Creditors
- Step 1: Meeting with a Licensed Insolvency Trustee or Administrator to discuss your financial situation, and available options.
- Step 2: Providing the Licensed Insolvency Trustee or Administrator with copies of all relevant financial information and, if viable, finalizing the terms of your Consumer Proposal.
- Step 3: Signing the Proposal documents, which are then filed with the Office of the Superintendent of Bankruptcy.
ONCE YOUR CONSUMER PROPOSAL IS FILED YOU RECEIVE IMMEDIATE PROTECTION FROM YOUR CREDITORS.
What is the process?
- After you sign your Consumer Proposal, the Licensed Insolvency Trustee prepares a report to your creditors that includes the causes of your financial situation and whether it supports the terms of your Consumer Proposal;
- Creditors have 45 days to consider the Consumer Proposal unless a creditors’ meeting is required. If the majority vote in favor, your Consumer Proposal is deemed accepted;
- Automatic Court approval is obtained 15 days after your creditors approve the Consumer Proposal;
- Upon Court approval, you will begin making payments under the terms set out in your Consumer Proposal; and
- You are required to attend two counselling sessions.
In a Proposal, you remain in possession of your assets and control of your financial affairs.