Consumer Proposals


Consumer Proposals.

A consumer proposal allows a person to avoid bankruptcy and to keep his assets such as a home, while making monthly payment that are affordable and last no more than five years.   With a consumer proposal you pay only part of what is owed say 40% or even 30% of your debt.

A consumer proposal is a win-win for all.   You get a fresh start and your creditors get more than they would in a bankruptcy.

Consumer proposals offer some immediate benefits:

  • You can negotiate with creditors to only pay a part of your debt;
  • Interest charges stop;
  • You will be debt free in five years or less;
  • Professional accreditation such as for accountants, lawyers, real estate agents etc. are not placed in jeopardy as they would be in a bankruptcy;
  • Harassing calls from creditors and threats of wage garnishments will stop;
  • You will be able to keep your assets such as a car, or home;
  • No additional fees are required beyond your agreed-upon monthly payments.  Trustee fees, are set by the Federal Government and are paid from these monthly payments.

The rules for Consumer Proposals are:

  1. It can only be filed through a bankruptcy trustee;
  2. It must provide the creditors with more than they would have received in a bankruptcy;
  3. It cannot be for longer than 5 years;
  4. The person cannot owe more than $250,000 excluding mortgage debt;
  5. As soon as a consumer proposal is filed all actions against the debtor, by law, must cease. This includes collection calls, garnishees and any legal action to collect the debt.
  6. Interest also stops accruing;
  7. Consumer proposals are considered accepted if, within 45 days of the filing, a creditor has not objected. If any creditor objects a creditors’ meeting is required;
  8. Creditors vote at the meeting with a simple majority of the dollars voted deciding on acceptance or refusal;
  9. If the consumer proposal is accepted all the creditors, including the ones who voted against the proposal and the ones who did not vote, are bound by the terms of the consumer proposal;
  10. If the consumer proposal is not accepted by the creditors the debtor is not bankrupt.

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Bankruptcy Essentials Book.

Bankruptcy Essentials.

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