Eliminating Debt - Consumer Proposal

Consumer Proposal

1) When am I protected?

First, the statement of affairs is prepared and signed. It is than e-filed with Industry Canada and automatically an Estate number is registered, the Consumer Proposal is than in effect. All known creditors along with yourself will receive a copy of the statement of affairs with Estate number noted for reference.

2) Is my Consumer Proposal automatically accepted or is there a waiting period or acceptance by the creditors?

No, a Consumer Proposal is not automatically accepted. It will take 45 days from the date of e-filing for all creditors to respond with a voting letter either accepting, counter offering or rejecting the Proposal. 1) If the creditors do not respond at all than they would be considered to have accepted the proposal. 2) If 25% of debt held by majority of creditors accepts the Proposal than it becomes a binding agreement between you and the creditors. 3) If Proposal is rejected than you can either continue to pay your normal debts or file for Bankruptcy. 4) If there is a counter offer than you will be advised and you will make the final decision should you want to counter offer back or accept their offer.

3) What happens if I am not able to continue to make my payments & have missed 3 payments in a row?

If this occurs your Proposal may be annulled and you basically are back to where you started. Any payments you made in the proposal will go towards reducing your total debt to the creditors but you will be responsible for the difference as the creditor’s rights to collect are revived at that point. You will not be able to file another Consumer Proposal on these debts again. However, if default is remedied within 30 days, it may be possible to revive the Consumer Proposal. Also, the courts have the power to make an order reviving a Consumer Proposal if sufficient reasons are given (such as illness, death etc.) being the cause for the default on payments.

4) What effect will this have on my credit bureau?

R7 (making regular payments through a special arrangement to settle debts).

5) How long will it sit on my credit bureau?

3 years (our services include techniques to reduce the estimated time frame)

6) Can I make bigger payments? Will there be penalties?

Yes, you can but do keep in mind that the minimum is always due every month no matter if you made a bigger payment the month before. There are no penalties for making bigger payments or paying off the entire amount of Proposal before the fixed time frame set out in the Consumer Proposal agreement between the creditors and yourself.

7) What will happen to my assets, including house, car & investments & Income?

You will keep all of them and they will never be monitored.