File a Consumer Proposal

Other solutions | Bankruptcy If Necessary

A consumer proposal is a formal, legally binding process, governed by the Bankruptcy and Insolvency Act, which is accessible to persons whose total debts do not exceed $250 000, excluding any debts related to their principal residence. As part of a consumer proposal, you work with a licensed insolvency trustee to devise a proposal for your creditors to recover a percentage of your debt, reschedule the payments over a longer period, or do both. Payments are made to the licensed insolvency trustee, who uses the funds to pay the creditors.

  • The advantages of a consumer proposal include keeping all of your assets; having proceedings brought against you by unsecured creditors, including wage garnishments, stayed (stopped); and being able to resolve your money difficulties without needing to declare bankruptcy.
  • The licensed insolvency trustee will file the proposal with the Office of the Superintendent of Bankruptcy (OSB). Once the proposal is filed, you cease making payments directly to your creditors, any wage garnishments are stayed, and the creditors’ proceedings against you are also stayed (stopped).
  • The licensed insolvency trustee presents the proposal to your creditors, as well as a report on your personal situation and the reasons for your financial difficulties.
  • The creditors have 45 days to accept or object to the proposal.

Any creditor with a proof of claim may indicate whether they assent to (accept) or dissent from (object to) the proposal. If a meeting of creditors is convened, any creditor may accept or object to the proposal before or during the meeting. They may also do so within 45 days of the filing of the consumer proposal.

A meeting of creditors is held if one is requested by one or more creditors provided they are owed at least 25% of the total value of the proven claims. This request must be made within 45 days of the filing of the consumer proposal. The meeting must be held within 21 days after being called.

For example, if the total proven claims are $150 000, the creditors vote “yes” and accept the proposal, and their total claims amount is at least $75 001, the proposal is deemed approved and all other unsecured creditors must also accept it.

If no meeting of creditors is requested within 45 days of the filing of the proposal, the proposal will be deemed to have been accepted by the creditors, regardless of any objections received (as applicable).

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