- Consumer Proposals
- Consumer Proposals FAQ
- How a Consumer Proposal Works
- Did Your Creditors Agree to Your Proposal?
- Annulment of a Consumer Proposal
- How a Consumer Proposal Affects Your Credit Rating
- Consumer Proposal Debt Limit
- A Glossary of Consumer Proposals Terms
- Joint Filing
- Consumer Proposals Law
- Are Consumer Proposals Often Refused?
- Consumer Proposal Payment Terms Examples
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A Glossary of Consumer Proposals Terms
We acknowledge the excellent online Glossary of the OSB, from which some of these definitions are adapted.
The Bankruptcy and Insolvency Act (BIA). See below.
The official cancellation of a consumer proposal.
See Annulment of a consumer proposal.
“Assessment” is the official term for your discussions and consultations with your trustee prior to filing a consumer proposal. Part of this process may be performed by a properly trained associate, although the final responsibility to see that you have been properly advised rests with your trustee.
The Bankruptcy and Insolvency Act sets out in specific detail the topics that should be covered in your assessment. Directive 6R – Assessment of an Individual Debtor deals specifically with this requirement.
See Step 1 – Assessment.
If you decide to proceed with a consumer proposal or bankruptcy, your trustee will prepare an Assessment Certificate, to record the fact that your relevant information was gathered, the fact that you were informed of your alternatives, and your decision.
See Step 1 – Assessment.
The things that you own are called your assets. They include your clothing and furniture, your car, your house, your bank account, literally everything that you own or have some kind of right to are included on this list.
In the context of bankruptcy, assets are all your property available for distribution for the general benefit of your creditors (available for paying debts).
Bankruptcy and Insolvency Act (BIA)
The Canadian federal law governing business and personal insolvencies and ways to resolve them, such as bankruptcy or a consumer proposal.
See The Law for Consumer Proposals.
Certificate of Full Performance of Proposal
A document issued by the trustee or administrator once a debtor has fully performed his or her obligations under the proposal.
See Step 7 – After your proposal is completed.
This is pre-approval to incur debt.
For example, when you are issued a credit card you might have a credit limit of $1,000. Until you use the card, you don’t owe any money, you have simply been approved to use up to $1,000 on credit. Once you use the card you have to repay the purchases and this is called debt.
An individual or business that you owe money to is called your creditor. In the context of proposals or bankruptcy, a creditor is a person having a claim provable under the Act.
Your creditor may be a secured creditor or an unsecured creditor, depending on whether your debt is secured or unsecured.
Same as “automatically annulled”.
See Annulment of a consumer proposal.
Another name for a Proposal to Creditors (see also below).
See The Law for Consumer Proposals.
See Step 5 – Your creditors vote.
If you are an insolvent individual, you are in one of these conditions:
- You can’t pay your debts as they come due.
- You don’t have enough assets to pay all your debts.
Section 2 of the BIA defines the Act’s criteria for a person to be considered insolvent.
"insolvent person"
«personne insolvable »
"insolvent person" means a person who is not bankrupt and who resides, carries on business or has property in Canada, whose liabilities to creditors provable as claims under this Act amount to one thousand dollars, and
(a) who is for any reason unable to meet his obligations as they generally become due,
(b) who has ceased paying his current obligations in the ordinary course of business as they generally become due, or
(c) the aggregate of whose property is not, at a fair valuation, sufficient, or, if disposed of at a fairly conducted sale under legal process, would not be sufficient to enable payment of all his obligations, due and accruing due;
In general, to be eligible to file a consumer proposal, a person (or persons) must meet this definition of insolvency.
See Step 2 – Eligibility to file.
A consumer proposal filed by more than one person together.
See Joint filing of a consumer proposal.
These are the debts that you owe to individuals and/or businesses. Your liabilities may be either secured or unsecured debts.
When you consult a trustee, they will require a complete list of your liabilities, including the creditor’s name, your account number, the amount you owe and whether you think they are secured or unsecured. If you don’t have all of this information for your first meeting it will be OK, but in order to file a consumer proposal you will need to provide it.
In a very real sense, finding a way to deal with your liabilities is probably why you came to this website in the first place.
Notice of Taxation of the Administrator’s Accounts and the Discharge of the Administrator
See Step 7 – After your proposal is completed.
Notice of Intention to File a Proposal
A legal document filed with the Official Receiver stating that the debtor intends to file a proposal. The document is to include the name and address of the licensed trustee who has consented in writing to act as the trustee under the proposal and the names of the creditors who are owed $250 or more and the amounts of their claims. The filing of this document triggers the protection afforded to insolvent debtors under the Bankruptcy and Insolvency Act.
See Step 5 – Your creditors vote.
The Official Receiver is a federal government employee in the OSB, appointed by the federal cabinet. The Official Receiver, among other things, accepts the documents that are filed in proposals and bankruptcies, examines bankrupts under oath and chairs meetings of creditors.
See Step 5 – Your creditors vote and Step 7 – After your proposal is completed.
The document which …
See Step 4 – Documents for filing and Examples of payment terms.
The Office of the Superintendent of Bankruptcy, a part of the Industry Canada, which administers and enforces Canadian bankruptcy laws, including the Bankruptcy and Insolvency Act.
In law, a “person” is any individual, partnership, or corporation legally able to do business – that is, make contracts, etc. However, in this website we mean what the law calls a “natural person” – that is, a flesh-and-blood individual like you or me, otherwise commonly known as a consumer.
See Step 2 – Eligibility to file.
A creditor's written statement that is submitted to prove the creditor's claim; used as the basis for paying dividends, if accepted by the trustee.
This is similar to a consumer proposal, for consumers with more than $250,000 in debts and for any businesses.
See The Law for Consumer Proposals.
The bankrupt's financial statement or a balance sheet of assets and liabilities, showing the estimated value of assets and the names and addresses of creditors and the amounts owed.
See Step 4 – Documents for filing.
Statement of Income and Expense
See Step 4 – Documents for filing.
Statement of Receipts and Disbursements
A statement detailing the receipt and disbursement of funds, interest received, fees charged by the trustee, all the dividends distributed to the creditors and particulars of property that is not sold.
See Step 7 – After your proposal is completed.
For a free consultation on whether a consumer proposal is right for you, contact a bankruptcy trustee near you.