Tag: debt repayment

What Happens if I Default on My Consumer Proposal

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If a debtor is 3 months in arrears of monthly consumer proposal payments the consumer proposal is deemed annulled, which means that creditors can resume collection actions. There is no automatic bankruptcy if a debtor defaults on a consumer proposal.

that fails to make more than 2 payments cumulative during the Proposal will have their Proposal annulled and creditors can resume collecting their balances plus interest less any payments made. While a default on a Consumer Proposal will not automatically result in a Bankruptcy, however, the debtor cannot file another Proposal.

Dealing With Debt – Understanding the Two Types of Proposals

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Division 1 Proposal Is when a consumer debtor owes more than $250,000 in debts, excluding the mortgage on their principal residence. If creditors don’t accept this proposal there is a deemed personal bankruptcy.

A consumer proposal is when a consumer debtor owes less than $250,000 in debts, excluding the mortgage on their principal residence. There is no deemed personal bankruptcy if the creditors reject the consumer proposal.

December 2014 – Personal Bankruptcy & Consumer Proposal Statistics

Personal bankruptcies were down 6.3% and consumer proposal filings were up 7.6% as compared to the 12-months ended December 31, 2013.

What happens If My Ex-Spouse Goes Bankrupt?

If both parties have agreed to assume responsibility for certain debts, it does not absolve them, if one of them defaults on a debt, that was granted to both parties jointly. Bankruptcy laws and family laws do not deal with assets and liabilities in the same way; there can be conflicts and unintended consequences when the two interact.

Is Bankruptcy My Only Option?

Bankruptcy is not the only debt solution option available to resolve overwhelming debt. Your Trustee (Licensed Insolvency Trustee) can also put together a consumer proposal to your creditors. Where you pay a portion of the debt, you owe your creditors, and the creditors write off the remaining balance of the debt.