A consumer proposal is an offer to your creditors stating you will pay them a certain amount of money over a five year period or less. This amount is less than what was agreed on at the beginning of the contract or loan. The consumer proposal is a formal agreement that is prepared and filed under the Bankruptcy and Insolvency Act by one of our Proposal Administrators in the GTA at Yanch Dey & Associates Ltd.
After you file a consumer proposal:
- Collection companies and creditors will stop calling you about your debts
- Any wage garnishments will be stopped
- No further interest will be applied to any debts you owe
After the consumer proposal is prepared and submitted on your behalf, the trustee then contacts the creditors you owe to inform them that you’ve filed a consumer proposal.
At this point, the creditors have 45 days to request a meeting of creditors. If there is no requirement for a meeting, your proposal is deemed to be accepted. If there is a request for a meeting, your creditors will then vote on whether or not to accept the proposal. If the majority of your creditors vote to accept your proposal, it’s binding on them all.