FAQ's for Consumer Proposals & Bankruptcy
How is one's spouse affected by a Consumer Proposal?
Which debts are included in a Consumer Proposal?
What is the role of the Administrator in a Consumer Proposal?
How much will the Consumer Proposal process cost?
Who is notified when one makes a Consumer Proposal?
What happens to one's assets (car/house) during/after the Consumer Proposal process?
Who can make a Consumer Proposal?
How is a Consumer Proposal accepted?
What happens if a Consumer Proposal is not accepted?
What is the purpose of a Consumer Proposal?
How is one's spouse affected by a Consumer Proposal?
If the spouse has similar financial obligations, it is possible to make a joint Consumer Proposal. Two or more consumer proposal may be joined where they could be reasonably dealt with together because of the financial relationship of the consumer debtors involved.
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Which debts are included in a Consumer Proposal?
Unsecured creditors, such as credit cards or unsecured loans. If you owe money to a Bank on account of a car loan, for example, the bank will usually be satisfied to sit back and continue to receive your monthly payments on the loan. Unlike Bankruptcy, you do not have to automatically give up your assets in a proposal. Secured Assets, such as the financed car, are dealt with by you and the Bank. Certain other debts, such as alimony, child support, parking tickets, court fines, and penalties, are not eliminated by a proposal.
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What is the role of the Administrator in a Consumer Proposal?
The Trustee or someone from his office will ask you about your financial situation, assess it and give you advice about what kind of proposal may be best for you and your creditors. The Trustee will prepare the documents and you will be asked to sign the required forms, which will then be filed with the Official Receiver. Within ten days after filing your proposal with the Official Receiver, the Trustee is required to send the Official Receiver a report. The report contains the Trustee's opinion about whether the proposal is fair and reasonable and whether he or she believes you will be able to perform it. It also contains a list of your assets and debts, and a list of your creditors.
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How much will the Consumer Proposal process cost?
There is a filing fee to be paid to the Superintendent of Bankruptcy. In addition, the Trustee is entitled to be paid. These fees are currently prescribed to be 1,550.00 +GST in the Bankruptcy and Insolvency Rules.
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Who is notified when one makes a Consumer Proposal?
The Trustee must send to each of your creditors a copy of your proposal and a copy of the report on the proposal. The Trustee will ask the creditors to accept or reject the proposal. The Trustee will also provide information about calling a meeting of creditors.
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What happens to one's assets (car/house) during/after the Consumer Proposal process?
A Consumer Proposal is usually directed only to unsecured creditors, such as credit cards or unsecured personal loans. If you owe money to a bank on account of a car loan or mortgage on your house, for example, the financial institution will usually be satisfied to continue to receive your monthly payments on the loan. If you wish to continue to keep certain assets, you and the secured creditor deal with secured assets.
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Who can make a Consumer Proposal?
An insolvent or bankrupt individual, whose debts are less than $75,000, excluding a home mortgage, can make a consumer proposal. When a bankrupt wishes to make a proposal, it must first be approved by the inspectors and the bankrupt must have obtained the assistance of a trustee who will be the administrator of the consumer proposal. It is possible to make a joint consumer proposal. Two individuals, such as a married couple, can file a joint consumer proposal when it can be reasonably dealt with together due to the commonality of their debts. This only applies to cases where their joint debts do not total more than $75,000.00
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How is a Consumer Proposal accepted?
Your creditors will have up to forty-five days to consider whether to accept or reject your proposal. A creditor may send a note to the administrator accepting or rejecting the proposal. If creditors do not respond, they will be considered to have accepted the proposal. If a sufficient number of creditors accept the proposal, then it will become binding on you and your creditors, and you will have to meet its terms.
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What happens if a Consumer Proposal is not accepted?
If the Proposal is rejected, you will no longer be protected by the Act. The Administrators will, within five days, notify you, all your creditors and the Official Receiver of this fact. Your creditors will now be able to take legal steps to recover their debts from you. If you were bankrupt when you made this proposal, the administration of your bankruptcy will continue.
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What is the purpose of a Consumer Proposal?
A Consumer Proposal is an offer made by a debtor to his or her creditors to modify his or her payments. For example, you may propose you will pay a lower amount each month, but over a longer period of time. Or you may propose that your creditors accept being paid a percentage of what you owe.
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How is one's spouse affected by a Consumer Proposal?
Which debts are included in a Consumer Proposal?
What is the role of the Administrator in a Consumer Proposal?
How much will the Consumer Proposal process cost?
Who is notified when one makes a Consumer Proposal?
What happens to one's assets (car/house) during/after the Consumer Proposal process?
Who can make a Consumer Proposal?
How is a Consumer Proposal accepted?
What happens if a Consumer Proposal is not accepted?
What is the purpose of a Consumer Proposal?
How is one's spouse affected by a Consumer Proposal?
If the spouse has similar financial obligations, it is possible to make a joint Consumer Proposal. Two or more consumer proposal may be joined where they could be reasonably dealt with together because of the financial relationship of the consumer debtors involved.
Back to top
Which debts are included in a Consumer Proposal?
Unsecured creditors, such as credit cards or unsecured loans. If you owe money to a Bank on account of a car loan, for example, the bank will usually be satisfied to sit back and continue to receive your monthly payments on the loan. Unlike Bankruptcy, you do not have to automatically give up your assets in a proposal. Secured Assets, such as the financed car, are dealt with by you and the Bank. Certain other debts, such as alimony, child support, parking tickets, court fines, and penalties, are not eliminated by a proposal.
Back to top
What is the role of the Administrator in a Consumer Proposal?
The Trustee or someone from his office will ask you about your financial situation, assess it and give you advice about what kind of proposal may be best for you and your creditors. The Trustee will prepare the documents and you will be asked to sign the required forms, which will then be filed with the Official Receiver. Within ten days after filing your proposal with the Official Receiver, the Trustee is required to send the Official Receiver a report. The report contains the Trustee's opinion about whether the proposal is fair and reasonable and whether he or she believes you will be able to perform it. It also contains a list of your assets and debts, and a list of your creditors.
Back to top
How much will the Consumer Proposal process cost?
There is a filing fee to be paid to the Superintendent of Bankruptcy. In addition, the Trustee is entitled to be paid. These fees are currently prescribed to be 1,550.00 +GST in the Bankruptcy and Insolvency Rules.
Back to top
Who is notified when one makes a Consumer Proposal?
The Trustee must send to each of your creditors a copy of your proposal and a copy of the report on the proposal. The Trustee will ask the creditors to accept or reject the proposal. The Trustee will also provide information about calling a meeting of creditors.
Back to top
What happens to one's assets (car/house) during/after the Consumer Proposal process?
A Consumer Proposal is usually directed only to unsecured creditors, such as credit cards or unsecured personal loans. If you owe money to a bank on account of a car loan or mortgage on your house, for example, the financial institution will usually be satisfied to continue to receive your monthly payments on the loan. If you wish to continue to keep certain assets, you and the secured creditor deal with secured assets.
Back to top
Who can make a Consumer Proposal?
An insolvent or bankrupt individual, whose debts are less than $75,000, excluding a home mortgage, can make a consumer proposal. When a bankrupt wishes to make a proposal, it must first be approved by the inspectors and the bankrupt must have obtained the assistance of a trustee who will be the administrator of the consumer proposal. It is possible to make a joint consumer proposal. Two individuals, such as a married couple, can file a joint consumer proposal when it can be reasonably dealt with together due to the commonality of their debts. This only applies to cases where their joint debts do not total more than $75,000.00
Back to top
How is a Consumer Proposal accepted?
Your creditors will have up to forty-five days to consider whether to accept or reject your proposal. A creditor may send a note to the administrator accepting or rejecting the proposal. If creditors do not respond, they will be considered to have accepted the proposal. If a sufficient number of creditors accept the proposal, then it will become binding on you and your creditors, and you will have to meet its terms.
Back to top
What happens if a Consumer Proposal is not accepted?
If the Proposal is rejected, you will no longer be protected by the Act. The Administrators will, within five days, notify you, all your creditors and the Official Receiver of this fact. Your creditors will now be able to take legal steps to recover their debts from you. If you were bankrupt when you made this proposal, the administration of your bankruptcy will continue.
Back to top
What is the purpose of a Consumer Proposal?
A Consumer Proposal is an offer made by a debtor to his or her creditors to modify his or her payments. For example, you may propose you will pay a lower amount each month, but over a longer period of time. Or you may propose that your creditors accept being paid a percentage of what you owe.
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