How to File a consumer proposal in Canada
Making a proposal to your creditors can be overwhelming, especially when you may not understand what is happening, the legal terminology and the steps in the consumer proposal process. Below is a step by step explanation of the process you will go through when you make a formal arrangement with your creditors to eliminate your debt. Our partners will handle virtually everything for you.
A great decision - Deciding to take control of your debt takes a lot of courage. You are taking a great and rational step in your fiscal future.
Set up an complimentary consultation - The first consultation is 100% free to all of our members and there is no obligation to act. During your consultation, we will review your financial situation and ask for information about your income, your assets, your monthly expenses and your outstanding debts. Once we have a good understanding of your fiscal situation we will be able to guide you towards the right debt solution.
Education helps you make the right decision - After reviewing your financial situation, your debt specialist will discuss with you your available options to get out of debt and help you make an informed decision about whether filing a proposal to your creditors is the most appropriate solution.
Preparing the consumer proposal – Our partners will help you prepare a proposal to your creditors that is reasonable and fair for all. The proposal will document the amount you propose to repay, the monthly payment amount and over how many months you will make payments for.
Consumer proposal submission – Our partners will file your proposal with the Court and send a notice to all of your creditors. The creditors will then have 45 days to consider your offer. During this time, you do not have to make any payments to your creditors and they cannot take collection action against you. Our partners will also file a report that outlines your situation, the causes of your financial difficulty, and a summary of your assets, debts and creditors. When over half of the creditors (in monetary value) agree to the proposal, all are deemed to have accepted the proposal.
Meeting of creditors – If our debt partners cannot get the majority of the creditors to agree to the original offer you put on the table, they can negotiate with them to discuss what they are looking for as part of the settlement and then discuss modifications to the plan. Our partners will expect to reach an agreement with them and have your amended plan accepted. A meeting of creditors is not mandatory in a consumer proposal. Creditors who make up at least 25 percent of all proven claims may also request a meeting. This meeting must be held within 21 days after being called. There, creditors vote with a simple majority of the dollar amount to accept or modify, or to refuse the proposal altogether.
Proposal is accepted - If no objection to the consumer proposal is received within 15 days after it is deemed accepted, the consumer proposal is then deemed approved by the court. Once this occurs, you and all of your creditors are bound by the proposal and you will begin to make your monthly payments for the time period outlined in the plan.
Fulfill your duties - To successfully complete your proposal, you must fulfill the duties as outlined in the proposal. These include:
- Making your regular payments or a lump sum payment, depending on the terms of the proposal you accepted.
- Attending two counselling sessions to help you understand the causes of your debt and help you with budgeting and financial management.
- Adhering to any other conditions outlined in the proposal.
Proposal completion - If you have fulfilled your duties and met the terms of your proposal, your Trustee will file the necessary final paperwork with the Office of the Superintendent of Bankruptcy and the creditors. You then will be legally released from the debts included in the proposal.