Difference between revisions of "Dealing with Debt (10:V)"
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=== 1. Consumer Proposal === | === 1. Consumer Proposal === | ||
Depending on the nature and amount of the debt(s) and the consumer’s ability to pay, a consumer proposal should be considered. Creditors may recover more money in consumer proposals than in bankruptcy. However, there are windfalls that arise in bankruptcies that can result in unexpected recoveries. A consumer proposal is a legal arrangement with creditors to repay a portion of the amounts owing (BIA s 66.11). Assets are not usually jeopardized (as they may be in bankruptcy) and the interest stops accruing as long as payments are being made. Legal action is not effective while the consumer proposal arrangement is in place (s 69.1(1)). Where secured creditors vote for the refusal of consumer proposal, the creditor may proceed with their recovery as they otherwise would be entitled to (s 69(6)). | Depending on the nature and amount of the debt(s) and the consumer’s ability to pay, a consumer proposal should be considered. Creditors may recover more money in consumer proposals than in bankruptcy. However, there are windfalls that arise in bankruptcies that can result in unexpected recoveries. A consumer proposal is a legal arrangement with creditors to repay a portion of the amounts owing (BIA s 66.11). Assets are not usually jeopardized (as they may be in bankruptcy) and the interest stops accruing as long as payments are being made. Legal action is not effective while the consumer proposal arrangement is in place (s 69.1(1)). Where secured creditors vote for the refusal of the consumer proposal, the creditor may proceed with their recovery as they otherwise would be entitled to (s 69(6)). | ||
Filing a consumer proposal is not free. If the CP is accepted by the creditors, the first $1,500 is paid to the trustee. The first $1,500 is deducted before calculating the distribution to creditors. Consumers are also expected to pay the administrator 20% of the moneys distributed to creditors under the consumer proposal. There may also be more fees [''Bankruptcy and Insolvency General Rules,'' CRC, c 368, s 129(1)]. Please consult a Trustee for more detailed information. '''For more information on consumer proposals, refer to the Office of the Superintendent of Bankruptcy in Canada's description of consumer proposals at''' | Filing a consumer proposal is not free. If the CP is accepted by the creditors, the first $1,500 is paid to the trustee. The first $1,500 is deducted before calculating the distribution to creditors. Consumers are also expected to pay the administrator 20% of the moneys distributed to creditors under the consumer proposal. There may also be more fees [''Bankruptcy and Insolvency General Rules,'' CRC, c 368, s 129(1)]. Please consult a Trustee for more detailed information. '''For more information on consumer proposals, refer to the Office of the Superintendent of Bankruptcy in Canada's description of consumer proposals at''' | ||
https://www.ic.gc.ca/eic/site/bsf-osb.nsf/eng/br01976.html | https://www.ic.gc.ca/eic/site/bsf-osb.nsf/eng/br01976.html | ||