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If you’re considering filing a consumer proposal, you may be wondering how it will affect things such as job security, continued harassment by your creditors, and tenancy/home ownership. In this, the sixth article in our consumer proposal series, we look at what your rights are with regard to some common concerns during a proposal.
- Demands for payment from creditors and/or bill collectors: As soon as creditors know you have filed a proposal (whether they’ve been told by you or your trustee), they should stop calling you for payment. If a creditor or collector continues to call, advise them to call your trustee.
- Employment: By law, your employer cannot fire, suspend, or lay you off because you filed a proposal. In fact, unless your wages are being garnished, your trustee will not have to inform your employer of the proposal at all, so he/she may not even know about it.
- Wage garnishment: In most cases, wage garnishment stops when you file a proposal. Your trustee can advise you further on this.
- Tenant rights: Your landlord cannot evict you because you’ve filed a proposal. (If you’re a home owner, check back next week when we look at home ownership during a proposal.)
- Utilities and services: Even if you’re in arrears, fuel, water, electricity, and phone services cannot be disconnected just because you’ve filed a proposal. Service providers can, however, require a cash deposit from you before supplying services in the future.
- Personal possessions and assets: You must tell your trustee about all your personal possessions and assets (such as RRSPs, property, vehicles, etc.), but you won’t have to give them up the way you do in a bankruptcy. You will, however, have to keep up any loan payments related to them (car loans, etc.).
- Child and spousal support: Support payments are not included in a consumer proposal and you must continue to make them.
- Income tax: If you owe income tax at the time of your proposal, it will be included as part of your unsecured debt and become part of the proposal. You will be responsible for filing and paying all future income taxes in the usual way.
Your trustee will be able to give you more in-depth answers to these and other questions you may have. To learn more about the consumer proposal process, check out our entire series to date.