|PROPOSAL TIMELINE||1. Initial consultation with a Trustee in Bankruptcy|
Initial consultation with a licensed Trustee who will perform a financial assessment and
advise you of your best proposal options.
|2. You complete the Application for a Proposal|
Application for a Proposal
The application provides the Trustee with all the necessary information to file his documentation. You may also be asked to provide backup documentation for verification of your debts.
|3. Documentation prepared by Trustee|
Documentation prepared by Trustee
Documentation will be prepared by the Trustee and filed with the OSB. This includes a Statement of Affairs which is a personal financial statement listing all of your assets and debts as well as a budget or cash flow statement showing what you can afford to pay. As well, a Trustee's Report on the Proposal shows the creditors what they would get under a bankruptcy versus proposal scenario.
|4. Signing of proposal documents by client|
Signing of proposal documents
After signing the Proposal documents, the Trustee will send copies of the proposal and reports to each creditor, asking the creditors to accept or reject the proposal.
Trustee files documents with OSB and creditors which
imposes the Stay of Proceedings|
The Trustee Discharge
Stay of Proceedings is imposed immediately upon the Trustee filing documents with the creditors.
In order for the consumer proposal to be approved, creditors having at least 50.1% of the total amount of the debt must accept the proposal.
For a Division 1 Proposal, 66.7% of the total dollar value of the debts plus 50% plus 1 of the total number of eligible creditors must accept the proposal. The Division 1 Proposal must then be approved by the court.
|6. Creditors have 45 days to accept the proposal|
Creditors in a consumer proposal have 45 days to either (1) accept the proposal as filed; (2) request a creditors meeting to gather more information; or (3) reject the proposal as filed.
|7. If accepted, you begin fulfilling your obligations and
making your payments to the Trustee who, in turn, divides
the payments amongst the creditors|
Fulfilling Your Obligations
You MUST fulfill your obligations under the terms of the proposal. Should you default on your payments for more than 3 months, your proposal is deemed annulled and your creditors have the right to continue their collection activities, legal proceedings or garnishment against you. At this point, many people will choose to go bankrupt for relief from their creditors.
|8. If not accepted, a meeting of creditors is called to
renegotiate an acceptable compromise of your debts|
Meeting of Creditors
We view this required meeting of creditors as an additional opportunity to speak to your creditors and get them onside. Many times, once creditors get more information regarding what they are entitled to in a bankruptcy versus what they will get in a proposal, they will be more willing to negotiate acceptable proposal terms with the Trustee.
|9. Certificate of Full Performance|
Certificate of Full Performance
Once you have complied with the terms of the proposal, the proposal is fully performed. The Trustee with provide you with a Certificate of Full Performance which serves as your discharge. After this, you are completely released of any obligations to the creditors.