Consumer Proposal – Creditor Voting

Creditor Voting on Consumer Proposals

A consumer proposal is a legally-binding agreement between an insolvent person who is unable to repay all of their unsecured debts and their unsecured creditors. It is governed by the Bankruptcy and Insolvency Act and enables insolvents to repay a portion of their eligible unsecured debts over a period of up to 5 years. Upon the successful completion of their proposal, the insolvent is released from the debts covered in their proposal.

In Ontario, proposals can only be filed and administered by federally-licensed trustees in bankruptcy, such as David Sklar & Associates.

How does Creditor Voting Work?

After your trustee has determined that you are insolvent and that you are able and willing to successfully complete a consumer proposal, you and your trustee will work together to create your proposal.

Your trustee will then file your proposal with the Office of the Superintendent of Bankruptcy (OSB) and submit it to your unsecured creditors for approval. Your creditors have 45 days to accept or reject your proposal.

During those 45 days, you will be protected from the unsecured creditors included in your proposal, who are required, by law, to:

  • stop charging interest,
  • stop all collection efforts,
  • stop wage garnishees,
  • stop collection calls, and
  • stop all legal actions.

Also, during this time, you will not make any direct payments to those creditors in your proposal.

What Happens if there are no Objections from Creditors?

If after 45 days, none of your creditors have requested a meeting, your consumer proposal will be considered accepted. 15 days later, if no request for a review of your proposal has been received, the Court will deem your proposal accepted by the Court.

It should be noted that in the vast majority of cases, proposals submitted by David Sklar & Associates are accepted by creditors. This is due, in part, to the great care we take while working with our clients and our commitment to finding the best solution for everyone involved in a proposal.

As officers of the court, we are licensed by the federal government to protect your rights and to ensure a fair proposal.

What Happens if there is an Objection?

If during the 45 day period, one or more creditors (who hold more than 25% of your unsecured debt) call for a meeting, then a meeting will be held for all your proposal creditors to attend (or vote by prearranged proxy). The OSB can also call a creditor meeting.

In order for your proposal to be rejected, creditors representing more than 50% of the dollar value of the debt covered in your proposal, must specifically vote to reject the proposal during the meeting, otherwise it will be considered accepted.

If there are no calls for a review of the proposal, then 15 days after the proposal is accepted at a meeting, the Court will approve the proposal. Note: both the OSB and the Court have the right to reject your proposal.

When a proposal is accepted by the Court, it becomes a binding agreement on you and all of the creditors in the proposal, including any creditor who may have voted against it.

What Happens if the Consumer Proposal is Rejected?

If a proposal is rejected you may work with your trustee to modify your proposal and resubmit it – or file for bankruptcy if you have no other reasonable options – or find another way to pay your unsecured debts.

In our experience, proposals that are fair and offer the unsecured creditors more money than they would get if you filed bankruptcy – are generally accepted.

What Happens After the Court has Accepted a Consumer Proposal?

You will then:

  • make all the agreed upon payments (usually monthly) to your trustee for disbursement to your proposal creditors,
  • attend two credit counselling sessions, and
  • honour all the terms of your proposal.

When you have successfully completed your proposal, you will be released from the debts covered by your proposal. You will have earned a fresh financial start and learned the skills to ensure a brighter financial future for you and your family.

Are You Eligible for a Consumer Proposal?

If you are in serious financial trouble, and are unable to repay your debts in a reasonable period of time – you might qualify for a consumer proposal.

If you live in the Toronto area, you are welcome to call us for a free, no-obligation consultation, where we will review your finances in detail and discuss all of your options for getting out of debt. If we can find a way for you to get out of debt without declaring insolvency, we will share the information with you. Call us at 416-498-9200 to book an appointment at one of our 6 Toronto Area offices.

If you live outside of the Toronto area – visit the Office of the Superintendent of Bankruptcy’s website for a complete list of licensed trustees in bankruptcy in your area.

 

Take Your First Step Towards A Debt Free Life

If you are overwhelmed by debt and live in the Toronto area, call us at 416-498-9200 to book a FREE, confidential appointment. We will review your financial situation in detail and discuss all of your options with you. Alternatively, you can fill out the form below and our team will reach out to you. 

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The best decision I've made was to contact David Sklar & Associates, they are experts in this matters and also have dedicated Licensed Counsellors that provide the best customer support, like Rhoda Lewis, who I highly recommend. She worked tirelessly on my case, explaining ever detail to me willingly. She demonstrates a true interest in her clients. I appreciate how she patiently walked me through what to do, step by step. I now have control over my finances, as a result my life is much more peaceful and I can focus on what matters. Thank you!
Nilda H.
20:18 16 Jun 22
Very helpful and friendly! I am more than satisfied with my experience here. And more than happy with the outcome! Would definitely recommend .
Peggy Bulger
15:10 14 Jun 22
Jerry at David SKLAR helped me thoroughly understand my options and made me feel at ease. If you are looking at this type of service/help, I 100% recommend you give them a call.
Colleen H
12:50 14 Jun 22
Rhoda is a wonderful person, She help me and guided me throughout the process. I couldn’t do it without her support and expertise. Now I can start fresh and full of hope of a better life ahead of me.
ariezel erandio
21:33 06 Jun 22
The service I recieved from David Sklar and Associates was great. I was able to meet with Christin Sylver. She is kind, understanding and, professional. She was able to answer all the quesions that I had regarding my debt. At the end of our meetings, I felt that there is a heavy burden lifted from my shoulders. I recommend Chistine to anyone who is looking into debt relief.
Aliya H
12:11 04 Jun 22
Jerry is a very patient person, he answered all my questions and made this experience so smooth and easy for me. I was not sure what to expect but dealing with him made me feel so much better. He sure knows what he is doing and how to put people at ease for sure (should have done this long ago). I recommend him to anyone I am so glad I had him on my side and now to do my part. Thanks Jerry ur greatPattie
Patty Murphy
21:34 18 May 22
Rhoda Lewis helped me achieve a fresh start two and half years ago! She was very professional with a very warm, caring personality! I emailed her today with a question and she responded quickly. She's great at her chosen profession!!
Debbie Livingston
01:24 11 May 22
Nothing but good things to say about Jackie. She was so nice and so understand and everything was so quick and easy. In a matter of a week, there was the solution that I never thought was possible. Thank you so very much for everything that you have done. ❤️❤️❤️
Cassandra Keenan
21:05 10 May 22
I was in a lot of debt and stress, Jackie Stanley with David Sklar & Associates was very professional, and extremely helpful with getting out of debt. I should of did this sooner, they take the all the weight and stress of a persons shoulders, amazing team at David Sklar & Associates!!
Hubert Z
03:08 10 May 22
Jackie helped me out during a really tough time and she made the entire process very easy and painless. I highly recommend reaching out to her if you find yourself in any financial trouble. You won’t be disappointed!
prettylush 13
02:42 10 May 22
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