After consumer proposal annulled

I have a 36-month consumer proposal ($700 per month payment) and I completed 28 months. Now the consumer proposal is annulled because of 3 missing payments. But I do not plan to go bankruptcy because of my surplus income and 21-month-long bankruptcy(the initial debt for this CP is about $30,000).

What will be the best way to solve this the annulment of my CP:

1. May I get court/judge approval to make a new consumer proposal (for the same creditors) and offer the creditors a better repayment? Do I have to work with the same trustee who did this CP to make this new consumer proposal, or May I choose other trustees to work this new proposal for these creditors?

2. During the past 28 months of this 36-month CP, I onced borrowed some payday loans and they are still outstanding, if I work with a trustee to make a new proposal, can I include all the debts (the old creditors in 36-Month-CP and the new payday loans creditors? Again, do I have to work with the same trustee or may I choose another trustee to fix all my money troubles (annulment of 36-month-CP + new payday loans)?

3. In addition, I have $2000 student loans. When the 36-Month-CP was signed, the student loan was not allowed in CP. Now, I am 10 years out of school, may I also put this student loan debt into a new consumer proposal?

Posted from: Ontario

One Response to “After consumer proposal annulled”

Barton Goth – Goth & Company Inc. -Trustee in Bankruptcy said...

The first option when a consumer proposal is annulled is your trustee can send a notification of revival within 30 days of the default. This is a new measure that was implemented back on September 18, 2009. But for your trustee to do this you must satisfy them that this was a temporary glitch and you have every ability to meet the terms as required.

If the 30 days has expired, I have seen a second proposal done to finish off the first, but this was prior to the revival rules that are now in place so it is questionable if the courts would entertain this. Regardless, this is very rare, is at the discretion of the court, and you would have to deal with your original trustee.

If those don’t work you are right that you can offer as second proposal offering a greater repayment than the first. However, this can’t be run as a consumer proposal as you are ineligible to make a second consumer proposal without court permission. So you can run the proposal as a Division I and in this case technically you could pick any trustee, although I would recommend using the same trustee as it will make things easier. This is also the only scenario where your student loans and the new payday loans could be included.

But you are best to review this with your trustee as the options can be dependent on the specifics of when you defaulted, when your proposal was filed etc.