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Difference between revisions of "Consumer and Ordinary Proposals"
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Consumer and Ordinary Proposals (view source)
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== Client problems == | == Client problems == | ||
* Client wants advice on repaying debts and has the financial ability to pay something toward all of them, but needs a lower overall monthly payment and additional time to pay.
| * Client wants advice on repaying debts and has the financial ability to pay something toward all of them, but needs a lower overall monthly payment and additional time to pay.
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== Summary of the law == | == Summary of the law == | ||
The federal [http://canlii.ca/t/7vcz ''Bankruptcy and Insolvency Act''], in Part III, contains the provisions under which a debtor can make a proposal to all or a class of creditors (for example, only unsecured creditors) to pay off a percentage of their debts, after which the debtor will be discharged at law from owing the balance of the debts to those creditors. | [[File:Consumer_Law_and_Debt_-_Consumer_and_Ordinary_Proposals.jpg|thumb|275px|right| link=| <span style="font-size:50%;">Image via www.istockphoto.com</span>]] | ||
The federal [http://canlii.ca/t/7vcz ''Bankruptcy and Insolvency Act''], in Part III, contains the provisions under which a debtor can make a '''proposal''' to all or a class of creditors (for example, only unsecured creditors) to pay off a percentage of their debts, after which the debtor will be discharged at law from owing the balance of the debts to those creditors. | |||
The proposal provisions are not the same as an assignment in bankruptcy. Proposals are designed to provide an alternative to bankruptcy for those debtors who have some ability to pay on their debts. In a bankruptcy, the debtor gives up what they own to eliminate their debts. A proposal is aimed at the debtor who has some ability to pay on their debts, but who cannot pay off all their debts over a reasonable time because of the overall amount due relative to the monthly income available to make payments. | The proposal provisions are not the same as an [[Assignments in Bankruptcy|assignment in bankruptcy]]. Proposals are designed to provide an alternative to bankruptcy for those debtors who have some ability to pay on their debts. In a bankruptcy, the debtor gives up what they own to eliminate their debts. A proposal is aimed at the debtor who has some ability to pay on their debts, but who cannot pay off all their debts over a reasonable time because of the overall amount due relative to the monthly income available to make payments. | ||
The ''Bankruptcy and Insolvency Act'' provides for two types of proposals: consumer proposals and ordinary proposals. | The ''Bankruptcy and Insolvency Act'' provides for two types of proposals: consumer proposals and ordinary proposals. | ||
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== Related topics and materials== | == Related topics and materials== | ||
See the other sections on getting out of debt: | See the other sections on getting out of debt: | ||
* Debtor’s Options for Getting Out of | * [[Debtor’s Options for Getting Out of Debt]]
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* Assignments in | * [[Assignments in Bankruptcy]]
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* Orderly Payment of | * [[Orderly Payment of Debts]]
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See related topics: | See related topics: | ||
* Types of Lenders and Creditors
| * [[Types of Lenders and Creditors]]
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See also People’s Law School’s page on [https://www.peopleslawschool.ca/everyday-legal-problems/money-debt/getting-out-debt/making-consumer-proposal making a consumer proposal] and the page “[http://www.ic.gc.ca/eic/site/bsf-osb.nsf/eng/h_br01854.html You Owe Money]” from the Office of the Superintendent of Bankruptcy Canada. | See also People’s Law School’s page on [https://www.peopleslawschool.ca/everyday-legal-problems/money-debt/getting-out-debt/making-consumer-proposal making a consumer proposal] and the page “[http://www.ic.gc.ca/eic/site/bsf-osb.nsf/eng/h_br01854.html You Owe Money]” from the Office of the Superintendent of Bankruptcy Canada. | ||
