Who can make a consumer proposal in Canada?
An insolvent person whose debts are less than $250,000, not including their home mortgage.
What are the fees in a consumer proposal?
The fees are the same across Canada. They are set by the government.
Are there different types of proposals in Canada?
Yes, there are consumer proposals and proposals under Division 1 of the Bankruptcy and Insolvency Act.
How is my consumer proposal accepted by the creditors?
Your creditors have 45 days in which to respond to your proposal. If no creditors respond or your creditors vote yes, your proposal is approved pending Court approval. However, if more than 25% of your creditors vote no a meeting must be held in which your creditors vote whether or not to accept your proposal.
What happens if my proposal is not accepted?
You will no longer be protected by the Bankruptcy and Insolvency Act and your creditors will be able to take legal steps to recover their debts from you. You would still be able to file an Assignment in Bankruptcy.
Are my spouse's assets or debts included in my bankruptcy or proposal?
No, only assets owned by you are included. If assets are jointly owned, then your portion may have to be sold. If most of your assets and debts are joint with your spouse, then it may be best for a joint bankruptcy or consumer proposal to be made.
What if I owe more than $250,000?
You may file a proposal under Division 1. If this proposal is rejected by your creditors, automatic bankruptcy results. The fees are based on the Trustee's time charges as opposed to a fee set by the Government.
What about my secured creditors if I go bankrupt?
Bankruptcies and consumer proposals do not usually affect the rights of secured creditors. If a creditor has a valid security against your property (i.e., car or house), and if you can afford monthly payments, financial arrangements may be made with the secured creditor to keep the property and continue paying for it.
Do I require a lawyer if I go bankrupt or make a proposal?
Usually you do not require a lawyer to go bankrupt. If you feel the need for legal advice and cannot afford a lawyer, legal aid may be available.