Creating a Consumer Proposal
What is a consumer Proposal?
How can a consumer Proposal help me?
How do I file a Proposal?
Can my Proposal be refused?
Can my landlord evict me or terminate my lease?
Can my utilities be disconnected?
Can I keep my personal possessions?
Can government debts be included in a Proposal?
What creditors will not be affected by my Proposal?
What is the cost of a Proposal?
What is a consumer Proposal?
A consumer Proposal is an arrangement to pay your creditors when you can no longer
make your regular payments. It is a way to negotiate with your creditors for the
reduction of your debts and/or extension of time to pay the debts. The payment plan
that is developed is based on your income, living expenses and family responsibilities.
A Proposal may also be funded by yourself, a third party, or through the sale of
assets that would not normally be available to your creditors. The Proposal is legally
binding on all your creditors once accepted. Your unsecured creditors can do nothing
to collect their accounts after you have filed a Proposal . The Proposal will stop
lawsuits, garnishees and seizures of assets.
How can a consumer Proposal help me?
A Proposal can:
- Stop garnishees (except for maintenance or support obligations)
- Stop harassment by your creditors
- Give you the additional time you need to pay your debts
- Reduce the total amount you must pay to your creditors
- Stop further interest from being added to your debts
How do I file a Proposal ?
A Proposal is filed in consultation with a our office. The Trustee will review your
situation and discuss all of your options. If you decide to file a Proposal , the
Trustee will assist you to develop a payment schedule. The Proposal documents will
be filed with the Superintendent of Bankruptcy and notice will be sent to your creditors.
At this point there is a stay of proceedings. This means that your creditors must
stop all collection action. You will then begin making payments to the Trustee who
will in turn pay your unsecured creditors.
Can my Proposal be refused?
In most cases, you can negotiate terms acceptable to all your creditors. If your
creditors or the Court do not believe that your Proposal is reasonable, they may
refuse it and you will have to consider other options.
Can my landlord evict me or terminate my lease?
No. A landlord cannot evict you or terminate your lease for rent owing when you
file your Proposal .
Can my utilities be disconnected?
No. Your fuel, water, electricity and telephone services cannot be disconnected
for amounts that you owe when you file. However, the utility companies may require
a security deposit to continue service.
Can I keep my personal possessions?
Your property is not affected by the filing of a consumer Proposal . However, if
you have pledged an asset to a creditor, such as a car, you will have to continue
the usual payments or you will lose the asset. If you cannot afford the payments
on the secured asset it should be turned over to the creditor. If there is a shortfall
on the loan after the asset is sold the shortfall will be covered by the Proposal
.
Can government debts be included in a Proposal ?
Yes. If your creditors vote in favour of the Proposal , most government creditors
are bound. This is the only process where your taxes can be negotiated and reduced.
What happens if I cannot make the payments after I have started the Proposal ? Your
Proposal can be changed with the approval of your creditors. If you stop making
payments and do not amend the Proposal , you will lose the protection the Proposal
gave you against actions by your creditors. You may have to consider filing for
personal bankruptcy to continue the stay against your creditors.
What creditors will not be affected by my Proposal ?
A consumer Proposal will not bind creditors for the following debts unless they
consent to the Proposal :
- Secured debts if you wish to keep the assets pledged
- Court fines, penalties and restitution orders
- Maintenance and support
- Most student loans
- Civil judgments for sexual assault, assault causing bodily harm or wrongful death
- Debts involving fraud or misrepresentation
What is the cost of a Proposal ?
The fees paid to the Trustee are included in the settlement made by you under the
terms of the Proposal . There is no additional cost to you. However, if the Proposal
is not accepted by your creditors, you will be responsible to pay our office $1,000
to cover fees and disbursements.
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