According to the Bankruptcy and Insolvency Act (BIA), a consumer proposal is presumed canceled if you are 3 months late in payment. This is not the trustee’s decision, but simply the application of the law. If this is the case, here we will shed light on the options available to remedy this situation.
Richard Killen and Associates are the trusted insolvency trustee in Canada and have assisted thousand of people like you in all over the Canada to become debt free. Let’s check here below the best possible options available incase if the consumer proposal got rejected.
Consumer Proposal Alternatives
Following the cancellation of your proposal, the protection from your creditors as they can take action against you and demand full payment of their debt. This can be a stressful situation and you want to address it quickly. Here are your options:
- Request reinstatement of the proposal
- Ask the Court to reinstate the proposal
- File bankruptcy
- Negotiate directly with your creditors
Request Reinstatement of the Proposal
Your Licensed Insolvency Trustee (LIT) has the power to reinstate your consumer proposal, if you can demonstrate within 30 days of its cancellation.
The LIT may request that you pay the full amount of the delay in order to reinstate the proposal.
The reinstatement of the proposal remains at the discretion of the LIT and your creditors will have a 60 days of time period following the date of the cancellation to oppose the reinstatement of your proposal.
Ask the Court to Reinstate the Proposal
If there is a 30 days time period after the deemed cancellation of your consumer proposal, you may go to court for reinstatement. This is a relatively complex procedure and you will probably in need an experienced lawyer.
If you take these steps, your chances of success are higher, especially if you can explain the reasons that led to late or no payments.
See Also: What is Mortgage Loan
If you are unable to reinstate your proposal through the means mentioned above, bankruptcy may be considered in order to regain protection from creditors and settle your debts.
To determine if this option may be useful for you, please contact the Licensed Insolvency Trustee. A complete analysis of your situation is necessary.
Negotiate directly with your Creditors
Once your proposal is cancelled, you should be contacted by your creditors and they will demand payment of your debt, potentially including interest retroactive to the day the consumer proposal was filed.
It is generally possible to undertake negotiations with each creditor in order to have the amount of the debt reduced, to reduce the interest charges or to extend the repayment period.
However this approach may not be useful for you if your creditors seems not interested to give you any advantage.
In addition, if you have an agreement with certain creditors. There is no way to take any benefit and proceedings may goes against you.
Regardless of your situation, it is strongly recommended that you contact your Licensed Insolvency Trustee as soon as possible. If reinstatement of your proposal is possible, this is the preferred option to avoid creditor proceedings against you.