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Consumer Proposals in Ottawa

A consumer proposal is a procedure under the Bankruptcy and Insolvency Act which consist of making an offer to your creditors to pay a percentage of your debts according to your capacity to pay.

The consumer proposal;

  • Total debts must not exceed $250,000.00 (not including the mortgage on the principal property.)
  • Debt consists of consumer debts (loan, credit cards, overdraft and income tax)
  • The proposal can be done jointly as long as the debts are substantially the same
  • The amount offered to the creditors can be a variation of:
    • One lump sum
    • Monthly payments for a period not exceeding 5 years
    • Payments plus sale of certain assets

Advantages

Should the proposal be rejected or become at default there is no automatic bankruptcy.

The process is simplified and there is no meeting of creditors (unless requested) and no Court hearing.

The financial situation is resolved without declaring bankruptcy.

In a proposal you can retain all of your assets.

Legal actions or garnishments are stopped.

Employment cannot be terminated because a proposal was filed.

The credit reference is removed three years after the proposal is fully executed.