Defaulting on a Consumer Proposal
A concern that may arise with your consumer proposal is, what happens if I default on my consumer proposal? When your consumer proposal is accepted, you are legally required to accept all of the conditions of the proposal. This is legally binding you and your creditors. You are to make the agreed upon payments as stated in the proposal. As long as you are following the agreed terms of your proposal, your creditors cannot take any further action against you.
If you fail to meet the agreed terms of your proposal and/or miss three months of payments, the proposal will be deemed annulled. You have the option of amending a consumer proposal within the three missed proposal payments. With amending a consumer proposal, this is a asking your creditors to alter the terms of the consumer proposal. With your consumer proposal, if three payments are missed, and it has not been amended, then it is automatically deemed cancelled/annulled.
With David Sklar and Associates, we help with providing our clients with the proper knowledge and tools to help make improved financial decisions so they do not run into these situations in the future. Going through a consumer proposal for anyone will require changes to their financial spending habits as they learn to manage their finances and repay their debts. With David Sklar and Associates, the majority of our proposal clients are able to make the payments in full and on time.
Ultimately, every case is different as there may be unforeseen issues that may arise that can affect your financial situation where you are not able to meet the agreed upon terms. Regardless, if three payments are missed, and your consumer proposal has not been amended, then it is automatically deemed annulled, and your creditors can take the necessary legal action for recollecting the debts you owe to them.
More information on amending a consumer proposal is available that can help to further explain the options you may have.
If you are incapable of dealing with your debt and would like to speak with a caring trustee at David Sklar and Associates, call us now at 416-498-9200 to book your free consultation.