Personal Proposals

In some cases it is possible to file a Joint Consumer Proposal. To qualify to file a Consumer proposal, you can not owe more than $75,000, excluding a mortgage on your principal residence. Ordinarily, most proposals would offer between 20 cents to 50 cents on the dollar to Unsecured Creditors. The term of most proposals would be over a period of 36 60 months. While most Consumer Proposals are funded by monthly payments out of &ldquosurplus income&rdquo, they can also be financed from sources that would not be available to creditors in a bankruptcy or can be done in one lump sum payment. When you file a proposal you retain control over all of your assets or property. The effect on your credit rating may be slightly better than a bankruptcy. The proposal payments to the Trustee include all costs including trustee fees, G.S.T., counseling fees, and the proposed Dividend to creditors. There is one monthly payment to the trustee and there are no other hidden charges. As soon as the proposal is filed, you will have the protection of the Bankruptcy and Insolvency Act. In most cases this will provide protection from wage garnishment or seizure of assets. The creditors have 45 days in which to vote on your proposal. The proposal will be approved or rejected by a simple majority. If it is approved, the proposal will be binding on all unsecured creditors. If your payments become more than three months in arrears, the proposal will be deemed to be annulled. The deemed annulment of a proposal does not automatically result in a bankruptcy. Creditors often prefer Consumer Proposals over bankruptcies because under the proposal they will receive a percentage of the debt owing to them and it is not certain that they would receive anything in a bankruptcy. Debtors often prefer Consumer Proposals to avoid bankruptcy, to protect certain property they might lose in a bankruptcy such as vehicles, surplus equity in a home, or Surplus Income. Debtors often prefer Consumer Proposals because they are so flexible. A Consumer Proposal may be paid out early, at any time. A proposal deals only with your debt and it does not affect the rights of creditors to pursue or collect from guarantors, coborrowers, cosigners or spousal credit card debts. Two financial counseling sessions must be completed for any person filing a consumer proposal. They must be completed during the course of the proposal. Once the terms of a proposal are completed you will receive a certificate of full performance. continued ...