Your trustee will ask you to provide information … discuss some of these options … He/she will recommend a consumer proposal if … make an informed decision …

While you must be insolvent, there is actually much more to it. … Can I file a consumer proposal jointly with another person? … Can I file a consumer proposal if I am bankrupt already? …

Your trustee must prepare all of the paperwork … Some of these documents are … What the documents are for … file the forms with an Official Receiver … Notice to Creditors …

Your creditors have 45 days … may do one of the following … Outcome of the vote … Rejection is uncommon …

You may have lost your job. … Two payments could be rescheduled … it is possible to amend the proposal … contact your trustee … Your options at this point include …

Proof of completion. … rebuild your credit … share your wisdom … Congratulations …

Financial and debt terms, legal references, proposal-related documents and events, with links to further details.

Step 3 – Decide your proposal's payment terms

So, you've reviewed your situation with a trustee (step 1) and determined that you are eligible to file (step 2). That’s great, but how do you figure out what portion of your debt to offer your creditors in your consumer proposal?

Basic rules

First a couple of basic rules that MUST be followed:

1. You must offer your creditors a greater benefit (more money) than they would receive if you were to file for bankruptcy, in order to get them to agree to your consumer proposal.
   
   This is pretty basic – if the deal you offer in your consumer proposal is for less money than your creditors will receive in a bankruptcy, why would any of your creditors agree to your consumer proposal?
   
   
2. You must be able to make the payments that you are proposing.
   
   Again, this just makes sense. There is no point offering your creditors a payment plan that you know you can’t maintain. (Go and look at your budget again.) If your proposal calls for a payment of $500 a month and you can only afford to pay $400 your proposal is going to fail.

Good News / Bad News

The good news is that your trustee will work with you to insure that these rules are kept – it’s part of the service trustees provide when you file a consumer proposal.

The bad news is that just because you’ve kept these rules, it doesn’t mean your creditors will accept your consumer proposal. Each creditor has their own set of rules for accepting (or rejecting) a consumer proposal. Trustees that handle a large number of proposals will have a good idea of what those rules are – your trustee should be able to warn you if any of your creditors require unusual terms or if your trustee thinks a particular creditor (or creditors) may ask you for more than you have offered.

Your trustee will be helpful

At the end of the day, it is up to your creditors to accept your consumer proposal. That being said, your trustee will assist you to draft a consumer proposal that your trustee believes is likely to be accepted. To do otherwise is a waste of everyone’s time.

Examples of payment terms

To see how your terms might look, see some examples of payment terms for consumer proposals that we have prepared for clients in the past.

Go to Step 4 – Documents required

We hope your find this step-by-step guide helpful. For a free consultation on whether a consumer proposal is right for you, contact a bankruptcy trustee near you.