Helpful Terms

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Division One Proposals
A Division One proposal is an agreement between a person and his/her creditors whereby the person pays only a portion of his debts (Say one-half), thus avoiding bankruptcy. A Division One proposal is made to the creditors through a trustee. If the creditors vote in favour of the proposal and the court approves it, then the proposal is a binding contract which all creditors must accept even the creditors who did not vote for the proposal. If the creditors do not accept the Division One Proposal the person is automatically bankrupt effective on the date of the Creditors' Meeting or the date the court rejected the Proposal.  If the proposal is accepted counselling is not required.