Consumer Proposals and Debt Management for Clients in Halifax and Across Nova Scotia
A consumer proposal is a compromise between the debtor and his/her creditors on the repayment of debt. The offer can include one or more of a variety of debt reduction compromises, for example, reduction or elimination of interest, extension of time, repayment of only a percentage of the debt. This can be an excellent debt management solution for many people.
Who can make a consumer proposal?
A consumer proposal can be filed by any person who is insolvent whose debts do not exceed $250,000 (excluding a mortgage on the person’s principle residence). If the debts exceed $250,000 it is still possible to file a proposal, but it would be filed under Division 1 of Bankruptcy and Insolvency Act. That is something the trustee would provide more information about.
How do I make a consumer proposal?
A consumer proposal can only be filed by a licensed trustee or administrator. Your first step would be to contact a trustee/administrator to discuss your situation. If after assessing your situation you determine that a consumer proposal is the right solution for you, the administrator have you sign the required forms and file them with the Official Receiver.
What happens after the consumer proposal is filed?
Upon the filing of the consumer proposal the “Stay of Proceedings” goes into effect. This means that the creditors will not be able to contact you and any actions they had taken against you are stopped (ie. garnishee orders).
How is a proposal accepted?
Your creditors will have 45 days to vote on whether they wish to accept or reject your proposal. The majority in value (51%) have to accept your proposal for it to be deemed accepted by creditors. If your proposal is accepted by creditors, then it has to be accepted by the Court. If there are no objections or issues, the proposal is normally deemed accepted by the Court 15 days after creditor acceptance.
What if the proposal is rejected?
If your proposal is rejected the Stay of Proceedings is lifted and the creditors will be able to take steps to recover their debt. You will not be automatically bankrupt if your proposal is rejected by creditors.
What if my proposal is accepted?
If your proposal is accepted and you fully meet the terms of your proposal, you will be given a “Certificate of Full Performance” and you will be relieved of your debts that were included in the proposal.
If your proposal but you fail to fully comply with the terms of your proposal or stop making payments on your proposal it will be annulled or deemed annulled. You will return to the same situation you were in prior to the proposal and the creditors will have the right to claim against you for any amount you owed them prior to the proposal (less any payments they received in the proposal).
Proposals can be revived in certain circumstances. This is something the Administrator can explain in more detail upon meeting with you.
A consumer proposal can help many people with debt management. We have helped many clients in Halifax, Dartmouth, Bedford, Kentville and elsewhere. If you have any further questions, please feel to email (email@example.com) or call us at 365-3032 or toll free 1-855-733-3032.
102 Chain Lake Drive, Suite 307
Halifax, Nova Scotia. B3S 1A7
15 Aberdeen Street
Kentville, Nova Scotia. B4N 2M9