Process for Consumer Proposals

If you are an individual who owes less than $250,000, not including the mortgage on your principal residence, a consumer proposal might be the right choice for you.

Process

1. Locate a trustee in bankruptcy and set up a meeting. (You can contact us at 416-915-3320 for a free consultation).  The trustee is someone who will work with you to develop a consumer proposal that works for both you and your creditors.
2. The trustee will file the proposal with the Office of the Superintendent of Bankruptcy. Once your proposal is filed, you will stop making any payments directly to your unsecured creditors, any salary garnishments will stop and lawsuits against you by creditors will be stayed (stopped).
3. The trustee will submit the proposal to your creditors, including a report on your personal situation and the causes of your financial difficulties.
4. Creditors have 45 days to either accept or reject the proposal.
   • If no objection to the proposal is received within 45 days of the filing, it is deemed to have been accepted by the creditors.
   • If no objection to the proposal is received within 15 days after the acceptance, it is deemed to have been approved by the Court.
   • If 25 percent of creditors refuse the proposal within 45 days of the filing, a meeting of creditors will be held that you must attend.
   • At the meeting of creditors, the creditors vote with a simple majority of the dollars voted deciding on acceptance or refusal of the proposal. If 50 percent plus one of the dollars vote to accept the proposal, all other unsecured creditors must accept it as well.
   • If no objection to the proposal is received within 15 days after the acceptance at the meeting, it is deemed to have been approved by the Court.
5. If your consumer proposal is accepted,
   • you will be responsible for paying either a lump sum or periodic payments to the trustee and adhering to any other conditions in the proposal;
   • you retain your assets so long as you make your payments to your secured creditors;
   • you must attend two financial counselling sessions; and
   • the proposal will be on your credit record for the duration of the term plus, depending on what province you live in, a few years thereafter. To learn more…
6. If your consumer proposal is not accepted, you can
   • make changes to the proposal and resubmit it for consideration;
   • consider other options for solving your financial problems; or
   • declare bankruptcy.
7. If you meet the conditions in the proposal in full, you will be legally released from the debts included in the proposal. If you miss three months of payments without filing an amendment to the proposal, the proposal will be cancelled and your creditors can once again take action to collect the money you owe them.