For some individuals the economic downturn has left them considering bankruptcy which is always the last resort. Bankruptcy is not your only option, the Licensed Insolvency Trustee’s (LIT’s) at David Sklar & Associates can help you explore all of your options and help you make the right decision for your business.
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A Division I Proposal enables a person or business to avoid bankruptcy and be released from their unsecured debts after they have repaid a portion of those debts and honoured all the terms of their proposal.
The Division I Proposal process varies from case to case. For most businesses and some individuals, it can include:
After you have met with a trustee and all relevant debt, liability, asset, and income information has been reviewed in detail the trustee will go over all the options available for debt relief. If both the individual and the trustee agree that a Division I Proposal is the best choice, they will then prepare a proposal together.
The proposal will set out the portion of debt your are able to repay over a given period of time and other terms that will be followed in exchange for being released from the debts included in the proposal.
The trustee then files and submits the proposal to your creditors. Note not all debts can be included in a proposal.
Once the proposal is filed the creditors must:
The creditors vote on whether to accept or reject the proposal. For a Division I Proposal to be accepted – more than 50% of the creditors who hold more than 66.6% of the debt must accept the proposal. The Court must also approve of the proposal before it can be put into effect.
Speak to a Licensed Insolvency Trustee
If your business is facing crippling debt and repayment issues and you are considering filing for bankruptcy, we recommend you visit one of our 7 offices in Ontario to discuss your situation and explore possible solutions with one of our experienced and certified professionals.
The Bankruptcy and Insolvency Act offers a Division I Proposal as a possible debt relief option to individuals who meet one of the two following conditions:
In Ontario, only bankruptcy trustees can file and administer Division I Proposals.
If your business is facing crippling debt and repayment issues and you are considering filing for bankruptcy, we recommend you visit one of our 7 offices in Ontario to discuss your situation and explore possible solutions with one of our experienced and certified professionals.
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Mark (not his real name) was a successful IT executive who had not dealt well with ‘accounting stuff’. As a result he was in trouble with Revenue Canada and several banks.
James (not his real name) was getting his business back into good shape – personal debt was threatening to destroy his third generation company.
