When you filed your consumer proposal to your creditors, you couldn’t possibly have imagined the world would be affected by a pandemic, followed by rising interest rates and increased cost of living. The reason you filed the proposal was to enable you to compromise your debt at a monthly amount you could afford.
If circumstances have resulted in you being unable to continue your monthly proposal payments, reach out to the Licensed Insolvency Trustee with whom you filed your proposal. They will review your current financial circumstances, keeping in mind how much is left owing on your proposal and discuss the following options:
- Find a way to increase your income or decrease your expenses to enable you to complete the proposal if that makes the most sense based on the balance remaining. Contact your cable or cell phone provider to see if you can reduce your monthly bill.
- You can miss two proposal payments during the whole term of your proposal and not be in default. These two months may give you some breathing room to get back on track with your monthly payments. Making a partial payment in the third month may provide you with one extra month before default.
- Make up the missed payments with your tax refund or quarterly GST payment.
- Amend the terms of your consumer proposal. The amended proposal does have to be voted on by your creditors, and if the required majority of creditors do not accept the terms, the total amount that you originally owed may be revived, less dividends plus interest.
- File an assignment in bankruptcy. If there is a significant amount left owing on your proposal and your circumstances have changed drastically, a bankruptcy may be the best solution.
Your Licensed Insolvency Trustee wants you to succeed in completing your proposal and obtaining a fresh start. Don’t wait until it is too late to reach out to them.
By Kathy Lenart – Insolvency Partner, Licensed Insolvency Trustee
CPA, CA, CIRP
Canadian Association of Insolvency and Restructuring Professionals (CAIRP)
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