Other Questions
What happens if the debtor stops making the payments?
- If you are required to make monthly payments and three of the monthly payments under the Consumer Proposal are missed, or
- if you are required to make the payments less frequently than monthly and you miss any payment for more than three months,
the Consumer Proposal will be in default. The creditors will again be able to take steps to recover their debts, less any payments paid to them during the Consumer Proposal. What happens if the debtor's circumstances change? The debtor is required to advise the Trustee of any changes in his/her circumstances that could jeopardize his/her ability to make the payments required under the Consumer Proposal. However, this will not change the amounts to be paid as agreed to in the Consumer Proposal.
What happens if the debtor's circumstances change?
The debtor is required to advise the Trustee of any changes in his/her circumstances that could jeopardize his/her ability to make the payments required under the Consumer Proposal. However, this will not change the amounts to be paid as agreed in the Consumer Proposal.
Does the debtor require a lawyer?
Generally, a lawyer is not required. However, if the debtor feels the need for legal advice, he/she may retain a lawyer.
How are secured creditors dealt with?
If a creditor has a lien on any assets (known as a secured creditor), the debtor may wish to do one of the following:
- surrender the asset to the secured creditor and obtain a receipt. Any balance left due after the asset has been sold by the creditor may or may not be a claim in the Consumer Proposal, depending on Provincial legislation, or
- make arrangements to pay the secured creditor in order to keep the asset.
How does a Consumer Proposal affect co-signers?
- Consumer Proposals will not cancel the liability of anyone who has guaranteed or co-signed any loans. These guarantors will still be responsible for the debts less any payments the creditor receives from the Consumer Proposal.
What happens to the debtor's assets?
The assets generally remain with the debtor. This includes any assets acquired during the term of the Consumer Proposal such as gifts, inheritance or winnings.
What happens to the credit cards in the possession of the debtor?
The credit cards generally remain with the debtor. However, one should recognize that the granting of the credit cards is a privilege provided at the option of the credit company. When the credit card company learns about the Consumer Proposal they may suspend this privilege.
What happens to the debtor's credit rating?
Once the level of debt has become so great that a Consumer Proposal is required, the credit rating is usually at its lowest. The ability to obtain and use credit after completion of the Consumer Proposal will depend upon the debtor's ability to convince a potential lender of his/her future personal financial maturity.
Who pays the Trustee?
The Trustee's fee is based on a tariff set by the Government. It is deducted from the amounts paid by the debtor and before payments are made to the creditors.
