Changes To Proposals September 18Th

 There are a couple of changes to the Bankruptcy and Insolvency Act affecting proposals that come into effect on September 18th that should be considered by anyone thinking of that option. Firstly, and most importantly, the limit for consumer proposals is raised from $75,000 of debt (excluding mortgages on your principal residence) to $250,000. This will mean that most proposals by individuals will now be filed as consumer proposals. The implications of this are: a)We have often had difficulty in getting creditors to vote on Division One proposals because the creditor meeting is held around three weeks after the proposal is filed. Apparently most creditors think they have the standard 45 days allowed in a consumer proposal to vote. Now, creditors will have the standard 45 days AND, if no votes are received, the consumer proposal will pass automatically. b)If a Division One proposal fails, the individual automatically become bankrupt. That is not the case with Consumer Proposals. An individual who’s Consumer Proposal fails may have no choice but to file bankruptcy, but they are not automatically deemed so. c)Individuals making Consumer Proposals after September 18th will be required to complete the same two counseling sessions on Budgeting and Financial Management that are currently required of individuals filing a bankruptcy. While this is not a major issue, and could even been completed during the 45 days before voting is determined, individuals who do not complete the required counseling will not receive their Certificate of Completion, even if they have paid all funds required under the proposal. As always, please consult with one of our insolvency team if you are considering a proposal, or any other option. Initial consultations are always free. Ian Schofield MNP Regina 306-790-7904