A Proposal is a formal legal proceeding that can only be filed with the help of a Licensed Insolvency Trustee in accordance with section 50 or 66 of the Bankruptcy and Insolvency Act. It’s a very specific, and highly regulated process under which both a debtor (the individual who owes money) and the creditor(s) (the people or companies that are owed money) have various rights and responsibilities. Since it is a formal legal process, a proposal is legally binding and any creditor who fails to recognize the proposal, and continues to attempt to collect their debt from you is breaking the law.
Once creditors representing the majority of your debt approve your proposal, a proposal is legally binding on both the debtor and creditor(s). This means that your creditors are no longer able to attempt to collect their debts outside of the proposal, charge interest, garnishee wages, or take you to court.
Better still is the fact that once approved, all of your creditors, even those who rejected your proposal are legally bound by it. This results in every accepted proposal addressing all debts, and not only the debts held by creditors who approve your proposal.
Upon filing a consumer proposal your Licensed Insolvency Trustee will notify all of your creditors including any courts at which a claim has been filed or a judgement has been obtained.
Unfortunately, your proposal gets annulled if you fall 3 months behind in your proposal payments, and your creditors’ rights are eventually revived meaning that they are able to once again attempt to collect their debts.
For more information about filing a Consumer Proposal, we recommend attending a free consultation with at Licensed Insolvency Trustee who is a highly trained professional specializing in settling debt through proposals.
Steve Welker and Company can be reached at 1 (844) 446-7771 or email@example.com.