Consumer Proposal
What is a Consumer Proposal?
There is an alternative to bankruptcy. You can make a Consumer Proposal to your creditors requesting that the amounts owed them be settled for a certain percentage on the dollar, with no interest accruing, and within a specific time frame that corresponds to your situation.
You can discuss specific terms and conditions with your Trustee. A Consumer Proposal is designed for simple administration of an individual’s estate that has little debt and uncomplicated financial affairs.
This alternative allows an individual with enough income to avoid a bankruptcy and correct his financial situation.
The creditors should take into consideration the effort you are making to reimburse them. A Consumer Proposal will suspend all legal proceedings and will allow you to stop the seizure of your assets. If a Consumer Proposal is not accepted by the creditors, there is no automatic bankruptcy, and all creditors can take action against you.
Can I make a Consumer Proposal?
A Consumer Proposal is reserved for individuals who have less than $250,000 in total debts. A Trustee can work with you to evaluate your financial situation and determine the type of proposal to be presented to your creditors.
What is the Consumer Proposal process?
The major steps in a Consumer Proposal are:
- Contact a Trustee - Click to contact us
- File a Consumer Proposal
- Attend a meeting of creditors (if required)
- Make payments to the Trustee
- Attend two (2) counselling sessions
- Obtain your certificate of execution
Each of the above steps is detailed below.
Contact a trustee
The first step when we have financial difficulties is to contact a Trustee to evaluate your financial situation and determine the type of Consumer Proposal best for you. The Trustee will send to creditors your Consumer Proposal and his report on the fair and reasonable character of the Consumer Proposal.
Filing a Consumer Proposal
The Trustee will prepare and file all necessary statutory documents for the Consumer Proposal with the Office of the Superintendent of Bankruptcy.
Attend meeting of creditors
The debtor must attend the first meeting of creditors only if requested by the statutory majority of creditors.
Monthly payments
In certain circumstances, the Consumer Proposal will consist of monthly payments to be made by the debtor during a certain period. In certain cases, one lump sum payment could be proposed to creditors. The Trustee distributes the funds to creditors.
Attend counseling sessions
Two (2) counseling sessions are obligatory to fulfill your obligations under the Law. These sessions will help you to discover and understand the causes of your financial difficulties. They will also provide information to help you manage your budget.
Certificate of Execution
When your Consumer Proposal is fully honoured, the Trustee will issue a Certificate of Execution. You are then discharged of all debts in the Consumer Proposal.
