how does a consumer proposal work

How Does a Consumer Proposal Work and What Are the stages?

  • The most difficult part of a consumer proposal is making the initial call to discuss your options.
  • Call to discuss your options. If a consumer proposal is right for you, we would help you formulate an offer to creditors based on your budget.
  • Allan Marshall & Associates Inc would draft the formal consumer proposal to be signed.
  • The proposal is then filed with Industry Canada, activating the stay of proceedings to protect you from legal and collection activities by creditors.
  • Allan Marshall & Associates Inc will contact your creditors to advise them of the proposal, the stay of proceeding and the date, time and location to submit their votes.
  • 45 days, from the date of filing the proposal, the votes will be calculated by Allan Marshall & Associates Inc to determine if the proposal to creditors has been accepted. (A proposal must be accepted by at least 50% of voting creditors to be approved.)
  • The creditors would have 15 days to request the proposal be ratified by the Court. If no request (there are very few requests) the proposal is deemed to be accepted by the court and becomes legally binding on all creditors. Even if some creditors voted against the proposal.
  • Once the proposal is accepted the payments or terms of the offer would start.
  • The proposal payments must be kept current. If the proposal payments get behind, at any point for any reason, by the equivalent of 3 payments the proposal would automatically default and fail. When a proposal is in default creditor’s rights are revived.
  • Upon the completion of the terms of your proposal a debtor would receive a certificate of full performance and any remaining unpaid balance would be discharged. (A debtor would no longer be legally responsible to pay any balance upon the completion of the proposal.)
  • Allan Marshall & Associates Inc would prepare a final Receipts and disbursements to be sent to Industry Canada, the creditors, debtor and apply for their discharge from the estate.
  • The proposal would be finished but the fact a proposal was filed would remain on your credit report for an additional 3 years.

These are the major steps involved in a consumer proposal. For more detailed information please contact Allan Marshall & Associates Inc to discuss your options.