Step #1: Consultation with a Trustee.

The 5 Steps Required in a Consumer Proposal.

Phone a trustee for a FREE Confidential Consultation.  

If you have the ability to make a proposal to your creditors the trustee will explain 

the proposal rules to you and work with you to draft a consumer proposal that 

you can afford and that your creditors will accept.

Step #1: Consult with a Trustee (continued).

The 5 Steps Required in a Consumer Proposal.

Proposal Rules:

Must be filed with a trustee in bankruptcy;

Cannot owe more than $250,000, excluding house mortgage (if more than 

$250,000 is owed a Division I Proposal is available);

Term cannot be for more that 5 years;

Creditors must be “better off” than if you file for bankruptcy;

	“Better off” can mean:

	1) Payments are made monthly over time;

	2) A third party such as a relative puts up a lump 

sum to be paid only if the creditors accept the proposal.

Step #2: Sign the documents.

The 5 Steps Required in a Consumer Proposal.

Take some time to think over the information you received at the Trustee’s 

Office.  When you are sure you want to go ahead, phone your trustee and set 

up a time to go back to sign the documents.

This meeting will take about an hour.  Creditors cannot take any action 

against you now.  If any creditors or collectors call you for payment tell them 

you filed a proposal and refer them to your Trustee. 

Step #3: Creditors consider the proposal.

The 5 Steps Required in a Consumer Proposal.

The Trustee will send the creditors a report on the financial affairs of the person 

including; the causes of financial difficulty; a copy of the proposal; a list of 

creditors and the trustee’s recommendation and reason why the creditors 

should accept the proposal. 

If no objection to the proposal is received within 45 days of the filing of the 

proposal, it is deemed to have been accepted by the creditors. If no objection is 

received within 15 days after the deemed acceptance it is deemed to have 

been approved by the court.  A creditors’ meeting will be held if the 

creditors request one.   

Step #3: Creditors’ meeting to consider the proposal.

The 5 Steps Required in a Consumer Proposal.

Creditors vote at the meeting with a simple majority of the dollars voted deciding on 

acceptance or refusal of the proposal.  If the proposal is accepted all the creditors, 

including the ones who voted against the proposal or did not vote, are bound by 

the terms of the proposal.  

If the creditors do not accept or the court does not approve the consumer proposal, 

the debtor cannot make another consumer proposal.  The debtor is not automatically 

bankrupt if the consumer proposal is not accepted. 

Step #4: Creditors accept the proposal.

The 5 Steps Required in a Consumer Proposal.

Almost all consumer proposals are accepted by the creditors because the creditors 

will be better off financially than if the person goes into bankruptcy.

Step #5: The proposal is completed.

The 5 Steps Required in a Consumer Proposal.

Your Trustee will issue you a Certificate of Full Performance to certify that the 

proposal has been fully performed. All your eligible debts are now erased.  

The credit bureau is notified of the full performance of the proposal and in 3 years the 

record of the proposal will be removed from your credit report.

 Summary

The 5 Steps Required in a Consumer Proposal.

Step #1: Set up a confidential consultation with a Trustee;

Step #2: Sign the Documents;

Step #3: Creditors consider the proposal;

Step #4: Creditors approve the proposal;

Step #5: Proposal is completed and eligible debts are erased.

HOME