August 28th, 2006 by Questions
I see that, in a previous answer, you said one CANNOT be sued for debts settled in a consumer proposal. And in another post, I see that one CAN be sued and/or their discharge opposed in a consumer proposal. If a Division 1 proposal is rejected and you are made bankrupt automatically, a creditor is then able to pursue you indefinitely? This is worrying.
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August 28, 2006 at 4:24 pm, Barton Goth, GCO Inc. Bankruptcy Trustees said:
You have hit on a few issues that I will try to clarify:
1. If you a Division I Proposal is refused by creditors, or you default on any of the provisions of the proposal you are automatically forced into a bankruptcy.
2. Regardless of whether a Division I Proposal, a Consumer Proposal, or a bankruptcy is filed, any creditor can apply to court for permission that the debt survive. While there are certain categories of debt that this is commonly done for (i.e. fraud, misrepresentation, maintenance, alimony, criminal fines / penaltiesâ€¦) in most circumstances this is very rare.
This is partially why it is important to review things with a licensed trustee. If you review all the specifics of your situation they will be able to help you formulate things in a manner that reduces any difficulties and outline any of the risk that may exist.