Filing of a consumer proposal
The following are the Steps involved in the consumer proposal process.
Step 1: Meet with your Licensed Insolvency Trustee ( LIT) at Risman Zysman. Our team will answer all of your questions and explain:
- The options available to you
- The potential payments that you will have to pay in a consumer proposal
- The debts that will be included
Step 2: Choose the right option.
Once you decide that a consumer proposal is the right option for you, your LIT will file the proposal with the government.
Step 3: Creditor review and Meeting of creditors
Your creditors will receive a copy of the proposal. They will review the terms and will decide if it is fair and reasonable in the circumstances.
The creditors have 45 days to call a meeting of creditors to discuss and vote on the proposal. If a meeting of creditors is held, 51% of the creditors attending the meeting need to vote in favor of your proposal.
If, at the end of 45 days, 25% or more of your creditors don't call a meeting of creditors, your proposal will be deemed accepted by your creditors.
Step 4: Court acceptance
After 15 days from this point, your proposal will deemed to be accepted by the courts. An interested party can apply for the courts to review the fairness of the proposal during this 15 day period, but this generally does not occur.
Step 5: Making your payments
Once court acceptance or deemed acceptance occurs, your proposal is legally binding on all of your creditors.
Once you make all of your payments, you will be issued a Certificate of Full Performance. At the point in time when this certificate is issued, your debts will legally be discharged.
You can always pay your proposal off early! There is no penalty for early payment. This is encouraged if you can afford larger payments or a lump sum payment.
Default of a proposal
You are required to make all of your payments as agreed to in your proposal. At any point in time, if you miss 3 payments combined, you will have defaulted on your proposal.
The Stay of Proceedings will be lifted resulting in your creditors being able to obtain a judgement for the debt owing. Your debts will accrue interest from the original proposal date and the balances will go back to the original amount (less amounts paid into the proposal). It is best to speak with your licensed insolvency trustee if payments are anticipated to be missed.