Glossary of Terms
Bankruptcy / Proposal / Financial Glossary |
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| proposal | Under the Bankruptcy and Insolvency Act there are two types of proposals that can be made. A proposal filed under Division I, is applicable to companies or individuals. This type of proposal was designed to facilitate corporate restructurings but is often used by individuals who do not qualify to file a consumer proposal. If the proposal is not accepted by creditors or is annulled by the Court it will result in a deemed assignment in bankruptcy. A proposal filed under Division II (also known as a consumer proposal), is a more simplified proposal that an individual (or individuals in some circumstances) can use to deal with their debts. A consumer proposal can only be filed by a debtor if they do not owe more than $75,000 (excluding mortgages on real property). One of the important features of a consumer proposal is that if the creditors do not accept the proposal, the person is not automatically bankrupt. |
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