Consumer Proposals
What is it?
A Consumer Proposal is a legally binding settlement agreement which usually involves some debt forgiveness and/or extended repayment. The debtor is granted further time to repay the debt and/or revise the amount payable, subject to the approval of his/her creditors and the Court.
Why file one?
Individuals who are unable to repay their debts, or unable to meet repayment deadlines, may choose to file a Consumer Proposal. It will stops collection actions (including garnishments) and interest charges.
Who can file?
Generally, you may file if:
- Your debts, excluding mortgages on your principal residence, do not exceed $250,000.00; and
- You are an insolvent natural person (ie: you are a resident in Canada, you have debts of a $1,000.00 or more and you are not able to pay your debts as they become due);
How do I begin the process of filing for a consumer proposal?
You can begin the process by either calling our consumer proposal offices in Toronto and speaking with one of our staff about your current financial situation or you may download our application form, fill it in and send it to us by email, fax, mail. We will review your information and contact you to arrange a meeting.
How long must I wait to see if my proposal was accepted?
It will be deemed to have been accepted by all of your unsecured creditors if 50% plus one of the creditors by dollar value vote in favour of the proposal.
What happens if it is not accepted?
If 25% or more of your creditors vote against accepting your consumer proposal, a meeting will be held where the Administrator will assist you in discussions with your creditors to negotiate an amended proposal acceptable to you and your creditors. If no agreement is reached, the process ends and the creditors may then take whatever legal actions are available to collect the money owed to them.
What happens if I can no longer fulfill the terms of my Proposal?
If you miss three payments, it will be annulled and comes to an end. The rights of the creditors will be revived and interest will be charged from the date you filed.
What happens when everything is completed?
When you complete all the terms, you will receive a Certificate of Full Performance and you will be relieved from all your previous debts.
How will my Consumer Proposal affect my credit rating?
It will remain on your credit record for 3 years following the date of completion of the proposal. However, once you receive your certificate of full performance, you may begin to re-establish your credit.
What debts cannot be included?
There are some debts that are not discharged, including, a fine or penalty imposed by a court; an award of damage by a court for bodily harm, sexual assult; alimony; support or maintenance of a spouse or child; a debt arising from fraud, embezzlement, misappropriation, or defalcation while in a fiduciary capacity; any debt for obtaining property by false pretenses or fraudulent misrepresentation; student loans if the bankruptcy occurs either before the student leaves school or within 7 years of leaving school.
Please contact us for immediate assistance.
Call (416) 967-6772 or email us at: manageyourdebt@sterncohen.com
We provide you with:
- Free Consultations
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Various Consumer Proposal Locations
- Evening Appointments
- Flexible Payment Terms
- Friendly Knowledgeable Professional Staff
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© 2012 Stern Cohen Shier Inc. All rights reserved.
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