consumer proposal

By: Bankruptcy Ottawa  09-12-2011
Keywords: Consumer Proposal

Now a year later, without written notice, I am receiving phone calls from a collection agency, in reference to that original loan, saying that they will turn this to a legal suit within the coming weeks.

It turned out that when the creditor accepted my friend’s consumer proposal, they struck her name from the bills, leaving me as the sole debtor. Without notice, they sent the file to a collection agency, which is now threatening legal action, in a short period of time.

In my eyes, this means that the creditor would end up receiving twice the original loan amount, as they are receiving the money from the consumer proposal, which I have not signed nor seen a copy, and the amount that they want to collect from me.

Having contacted the trustee that did up the proposal, I’ve had verbal confirmation that a clause was put in to “NOT hold the co-borrower liable of this debt”. The collection agency had no knowledge the the proposal, and I’ve arranged for them to receive a copy from the trustee, but as my name is not on the proposal, I am unable to get a copy myself.

How can something like this happen and what recourses do I have?

Answer: First, a consumer proposal is a public document. We suggest you contact the trustee, and advise them that you are a creditor in the proposal, since you are owed money as a result of co-signing the loan. You will then be able to obtain a copy of the proposal.

Second, you should contact the bank (not the collection agency), and ask them to advise the collection agency that they have already agreed to remove your name from the debt as a result of the acceptance of the consumer proposal.

If you are not successful with this approach, you should consult a lawyer.

On a side note, it is very unusual for a proposal to contain a clause eliminating liability for a co-borrower, so you will want your lawyer to review the proposal to determine your next step.

Keywords: Consumer Proposal

Contact Bankruptcy Ottawa

Email - none provided

Print this page

Other products and services from Bankruptcy Ottawa


RRSP and bankruptcy

If the RRSP is an RRSP that you have contributed to over the years, perhaps at your bank, than it is probably not protected, meaning you would lose your RRSP if you filed for bankruptcy. An RRSP is typically locked in when you convert a pension from your former employer to an RRSP, or if your RRSP is through work, where your employer is making the contributions.


bankruptcy Ottawa

First, she could call CRA and attempt to work out a payment arrangement with them, so that perhaps they will agree to take less of her pension each month. However, to answer your underlying question, yes, CRA does have the ability to garnish CPP if taxes are owing.


car and bankruptcy

It will be up to the lender to decide whether or not they will allow you to keep making payments on the car, so you can keep the car. If there is a loan against the car equal to the value of the car, the trustee will not take your car. What will happen to my new car if I go bankrupt in Ottawa.


Archive for the ‘bankruptcy’ Category

As executor of his estate you will work with your lawyer to liquidate his assets and use those assets to pay his creditors; your lawyer can provide you with more information. His only assets are RRSP’s and a small life insurance policy of which I am the beneficiary. He has business debts and credits cards and leases which I have not co-signed on. My husband has passed away.


bankruptcy discharge

However, in most cases the easiest course of action is to request a meeting with your trustee prior to your discharge hearing so that you fully understand what will happen at the hearing, so that you can prepare for it. If you are not satisfied with the assistance your trustee is giving you then yes, you could hire a lawyer to represent you at your discharge hearing.