Consumer Proposals – Paddon and Yorke

By: Paddon+yorke  09-12-2011
Keywords: bankruptcy, Consumer Proposal, creditors

What is a Consumer Proposal?

A consumer proposal is a legal process that provides a debtor with a simplified streamlined method to settle their debts with creditors without filing an assignment in bankruptcy. The proposal can be tailored to suit your present financial situation, whether it’s extended payments terms or a percentage of the total debt to be paid in monthly payments or in a lump sum.

Consumer proposals are intended to help reduce the number of bankruptcy filings by allowing debtors who owe less than $250,000 (excluding a mortgage on their principal residence) to negotiate with their creditors for the reduction of their debt and/or the extension of time for repayment.

As long as the consumer proposal offers more to your creditors than they would receive in a bankruptcy and your trustee is satisfied you can fulfill the terms, this may be a viable option for you to avoid bankruptcy.

Consumer proposals offer debtor rehabilitation while at the same time providing financial protection.

Who can make a Consumer Proposal?

A natural person who is bankrupt or insolvent and whose aggregate debts, excluding any debts secured by the person’s principal residence, do not exceed $250,000.00.

What are the Benefits of a Consumer Proposal?

A consumer proposal has many featured benefits:

  • Stops creditors from taking any legal action
  • Stops wage garnishments
  • Stops interest from accruing at the date you file a consumer proposal
  • Offers one manageable and affordable monthly payment
  • Extension of time for repayment and/or the reduction of debt you owe
  • Protects your assets
  • Allows you to avoid bankruptcy
The information in this article was current at 06 Dec 2011

Keywords: bankruptcy, Consumer Proposal, creditors, Debtor

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Services – Paddon and Yorke

The professionals at Paddon + Yorke will explain all of your options so you choose a solution that is right for you. Every year thousands of Canadians experience financial difficulties for for many different reasons. We promise to work with you to create a successful plan to deal with your debts.


Summary of Steps – Paddon and Yorke - summary of steps

When a decision is made to file an assignment in bankruptcy, the Trustee will inform the individual of the implications of bankruptcy, prepare the necessary documents and file the assignment in bankruptcy with the Office of the Superintendent of Bankruptcy. As an Officer of the Court, the Trustee represents the interests of all the creditors in the bankruptcy process and will investigate the affairs of the bankrupt as warranted.


FAQ – Paddon and Yorke

Should the creditors turn down the consumer proposal, the debtor will no longer be protected by the Act, at which point the creditors will again be able to take the necessary steps to recover their debts. The debtor is required to advise the trustee of any change in their financial situation that could jeopardize their ability to make the required payments set out in the consumer proposal.