A proposal can be refused, but if it’s reasonable, your creditors are likely to accept it. If a majority of your creditors feel that your consumer proposal is not reasonable, they may reject it and you will have to consider other options such as filing for bankruptcy.
If you are making a Division I proposal, yes, it can be refused.
In a proposal, creditors file a proof of claim with the trustee. The trustee then validates and accepts the claims, with each dollar of debt representing one vote. If a simple majority of the dollar value of the claims filed are accepted, the consumer proposal is approved. The claim and validation process is the same in a Division I proposal, but a majority of the actual number of creditors (representing two-thirds or more of the total debt) is required for approval.
If a creditor votes against your proposal but does not request a meeting of creditors, the vote is not taken into consideration. If a creditor does request a meeting of creditors , the trustee will arrange the meeting for you. The acceptance or rejection of your proposal will be decided at this meeting, so you will also have to attend. The trustee will help you with any negotiations that take place in order to ensure a favourable outcome for you.
In a Division I proposal, if acceptance by a majority of creditors is not provided, you will automatically be declared bankrupt at that time.
A meeting of creditors is required for a consumer proposal only if 25 per cent of the creditors request it. For a Division I proposal, a meeting of creditors is required 21 days after filing.
No, the Bankruptcy and Insolvency Act specifically forbids an employer from dismissing, suspending or laying off an employee solely because the employee has filed a proposal.
If you’d like to keep your home, you may be able to do so under a consumer proposal. Even if it turns out that you’re better off with a bankruptcy, if retaining the house makes sense from an emotional, family, and financial viewpoint, then we will try to help you make it happen.
No, a landlord cannot evict or terminate your lease just because you filed a proposal.
No, your fuel, water, electricity, and telephone services cannot be disconnected just because you file a proposal, even if you are in arrears. A public utility can, however, require you to provide a cash deposit before supplying services to you in the future.
Yes. You must still tell your trustee about your major possessions, but you don’t have to surrender them in a consumer proposal the way you do in a bankruptcy. If you want to keep your house, vehicle, or other secured assets, you can simply maintain your payments on those items.
Yes. Personal income tax, HST, GST, and PST are all debts that can be included in a consumer proposal. If you owe a significant amount of tax debt, you should see a trustee immediately.
Creditors must stop calling you for payment as soon as they are notified of your filing, whether you’ve told them about it yourself when they call or they’ve received the proposal documents from the trustee. If one of your creditors or a collection agency continues to harass you, tell your trustee, who will personally call them.
In most cases, yes.
In a proposal, the trustee will send the documents to your creditors within five days of the filing date. If creditors contact you between the time you file the proposal and the time they’re officially notified, refer them to your trustee. You don’t need to give them any other information. In a Division I proposal, the trustee must send the documents to the creditors 10 days prior to their meeting.
The trustee provides limited financial counselling to help you better manage your money, but ultimately, you are responsible for making the payments and not defaulting.
You are required to attend two counselling sessions in order to complete your proposal. Counselling is normally one on one with yourself and your trustee, and covers areas such as:
Counselling sessions are not required for Division I proposals.
If you file a proposal you can miss a total of two payments. Your proposal terms will be extended to include the missed payments. A missed third payment results in the automatic annulment of your proposal. At this point, your debts will be reinstated and your creditors are free to renew collection attempts. A Division I proposal typically allows you to miss up to three payments. If three payments are missed, the trustee will send you a letter telling you to rectify the default within 30 days. If you fail to do so, the trustee notifies creditors that it intends to seek its discharge. At this point, your debts will be reinstated and your creditors may resume collection efforts.
While your proposal can be amended with the approval of the creditors, it isn’t likely they’ll accept a smaller amount. If you can’t meet the terms of your existing agreement, talk to your trustee again. You may want to consider bankruptcy.
In a proposal, fees are paid according to a government tariff that your trustee will explain to you when your proposal is put together. The fee will be included in the amount you pay to the trustee for distribution to your creditors. There will be no surprises or extra charges. In a Division I proposal, the trustee’s fees are a negotiated term of the proposal and will be included in the money you pay under the proposal.
No. Depending on your situation, there may be other alternatives. These options can be discussed at your first consultation and include:
No. You must include all your unsecured creditors, including family and friends to whom you owe money. The only exception is a credit card with a zero balance, which you are not required to list.
Book your Free , No Obligation consultation with one of our certified counsellors today to see if a consumer proposal might be an option for you in: