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Possible solutions >> Consumer Proposal

Q : What is a consumer proposal?

A: It is an offer, made by a debtor to his creditors, to modify his obligations towards them. For example, you can suggest to your creditors to make lower remittances every month, on a longer period of time, or to reimburse only part of what you owe them.

Q. What are the advantages that the debtor withdraws from a consumer proposal?

A: The proposal lets the debtor keep his assets; the proposal will suspend all the procedures to seize, which the creditors would have been able to take.

Q: What happens to my assets?

A: The proposal helps the debtor to keep his assets.

Q: Who can do a consumer proposal?

A: All insolvent people with less than 75 000$ in debt, without the mortgage, can do this kind of proposal.

Q: What are the procedures to follow?

A: The procedures start when you ask for help from an administrator who can be either a bankruptcy trustee or a person named by the surintendant of bankruptcies. This person will ask you to expose your financial situation and will advise you on the type for proposal that you can submit to your creditors. The administrator will ask you to sign the required forms which will be deposited at the official receiver's office.

Q: What happens when a form is deposited at the official receiver?

A: In the next ten days following this deposit, the administrator must send a report to the official receiver. Included in this report is the opinion of the administrator on the fairness and reasonability of your proposal also on the chances you have to respect your engagements. It also includes a list of your debts and the list of your creditors. The administrator must receive from each of your creditors, a copy of your proposal and a copy of his report. It will also furnish the necessary information to present if an assembly of the creditors is required.

Q: How is a proposal accepted?

A: The creditors have 45 days to study your proposal, to accept it or to refuse it. All creditors can send a notice to the administrator to tell him his decision. If the creditors to not answer, we conclude that the proposal was accepted. If a good number of creditors accept the proposal, this will create a bound between you and your creditors, and your creditors will lose their right to put pressure on you for fast repayment as long as you meet your obligations with respect to the terms of the agreement.

Q: What happens if the proposal is rejected?

A: If the proposal is rejected, you will no longer be protected by the law, and your creditors will be able to take their case to court and obtain a judgement against you to receive the money you owe them.

Q: What happens if the proposal and the terms are respected?

A: When a proposal is totally respected, the administrator must give, to you and the official receiver, a certificate saying that the respect of the agreement was done and you will be released from all debts, as stated in the proposal.

Q: What happens if I stop doing the remittances and do not respect the terms of the proposal?

A: If you do not respect the terms of the proposal, it will be cancelled. Your creditors will be allowed to claim the payments of the amounts due before the proposal, less the money that you been able to reimburse since the acceptance of the proposal.

Q: Are there costs related to the proposal?

A: Yes. The are registration charges that must be given to the Superintendent of bankruptcy; the administrator also touches special fees. Theses charges are prescribed in the rules of the bankruptcy law and the insolvent.

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