Consumer Proposal – Creditor Voting

Table of Contents

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, call us at 1-844-962-9200 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. 

Share This!

I was a little nervous going into my consumer proposal with David Sklar & Associates as I had a horrible experience attempting to file with a different group.Following the first correspondence, I immediately felt much more relaxed and confident in my decision.Beatriz was incredible! I feel so lucky to have had her working with me.She was friendly and kind, professional, patient, considerate, and caring. I felt no judgment in anyway. Honestly, speaking with her regarding my debt felt like I was speaking with a family member – just very easy to discuss how I ended up in my financial situation and being met with understanding, no judgment.Mark was also very kind and made sure that I understood what was discussed and was open to going over it again if needed prior to signing.David Sklar & Associates is the team you want handling and assisting you with your debt. I have only positive things to say about them and will 100% recommend them to anyone if the situation ever arises.
ally.
1701530179
Helped me with filing for bankruptcy and getting a fresh start and made the whole process seamless and easy.
Sameer Kamal
1701361659
I would like to say "Thank you very much" for David Sklar team that handled my case smoothly and without any issues! I am glad that I ve got consultation by Jerry Janiec. He explained me all process in details and told me right away what options I do have to resolve financial difficulties. I ve proceed with consumer Proposal option and entire process was very smooth. Jerry took care of my case and gave me personal recommendations for future! Thank you very much Jerry and Hernee for your help and really take care of your clients!
Alexander Arepyev
1701306224
Very knowledgeable, helpful and fast service
Anthony Mcfeat
1701299046
I am so delighted to have found this company. They are the best. Everyone in the office is very nice never to busy to assist you. Thank you David Sklar and Shirley and associates for being you. 😊🌺😊
Deborah
1701263894
Trina was amazing and quick. No judgement was made and they all made me feel I made the right decision. Would highly recommend them
Crystal Minaker
1701222756
Trina was very easy to work with. Any questions I had were answered promptly. What seemed like a complicated process was explained in a clear manner that wasn't at all intimidating. It made for a more comfortable experience during a turbulent time.
Eldon Aubie
1701134421
Jackie is very professional...I would recommend David Sklar to anybody especially knowing how understanding they are.
Kimberley Lyder-Niles
1700968057
I had Shirley and Kim take care of my finances. From the very first moment I spoke with Shirley I could sense how caring, professional and patient she was. She was also very understanding with my lack of financial knowledge and never made me feel dumb as some other companies have.Her and Kim were always very quick to respond to emails, always available if I called and answered my abundance of questions in such detail that I now believe I have a thorough understanding of how finances work. I am hopeful about my fresh financial start and very grateful I had the privilege of meeting and working with these two beautiful women.I also spoke briefly with Richard over zoom and he to was extremely friendly, patient and made sure I was well taken care of.I could not recommend David Sklar and Associates more. Thank you again.
Shayleen Muzi
1700875951
Good professional team! Jennifer is the best, helped me through everything and answered all my questions. Made the process easy! Would recommend Jennifer and the team at David Skylar.
gary round
1700868378
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