Step 1: Find a Licensed Insolvency Trustee

Identifying a licensed insolvency trustee (LIT) is the first step in submitting a consumer proposal. A professional with federal government approval to handle consumer proposals and bankruptcies are known as a LIT.

By looking through the Office of the Superintendent of Bankruptcy’s database of licensed bankruptcy trustees, you can locate one in your area. As they will be directing you through the entire procedure, it is essential that you choose a LIT who is knowledgeable, experienced, and reliable.

Step 2: Meet with the Licensed Insolvency Trustee

Scheduling a meeting with a LIT is the next action after finding one. The LIT will examine your financial status and assist you in deciding whether a consumer proposal is the appropriate course of action for you during this appointment.

Also, they will assist you in crafting a proposal that is customized to your particular financial situation. The amount you can afford to pay your creditors each month and the duration of the proposal will be determined throughout this process.

Step 3: Draft the Proposal

The next stage is to prepare the proposal once you’ve met with the LIT and decided that it’s the best option for you. Together with you, your LIT will draft a proposal that specifies the monthly payment amount, the duration of the proposal, and any other terms and conditions that may be required.

You and your LIT must both sign the plan before submitting it to your creditors for approval.

Step 4: Submit the Proposal to Your Creditors

The proposal must be submitted to your creditors for approval after it has been written and signed. The proposal and a notice of the creditors’ meeting will be sent by your LIT to each and every creditor.

Your creditors may vote on whether or not to accept the plan at the creditors’ meeting. The proposal must be authorized by a majority of your creditors holding at least two-thirds of the total amount of your debts in order for it to be accepted.

Step 5: Attend the Creditors’ Meeting

There will be a meeting of your creditors when the proposal has been sent to your creditors. The meeting will provide you and your LIT the chance to discuss your plan with your creditors and address any questions they may have.

The proposal will then go before your creditors for approval or rejection. If the plan is approved, the terms become binding, and you are required to start paying as agreed.

Step 6: Make the Payments

You must start sending your LIT the agreed-upon payments as soon as the proposal is approved. Your creditors will get these payments in accordance with the proposal’s guidelines.

In order to avoid the proposal being revoked and your creditors resuming collection actions against you, it is essential that you make all of your payments on schedule.

Step 7: Complete the Proposal

The proposal will be finished after all of the payments specified in it have been completed. You will receive a certificate of full performance from your LIT, which attests that all of your commitments under the proposal have been met.

You will be able to start over with a clean slate if your debts are regarded as legally dismissed.

Additional Information to Consider

While the procedure for submitting a consumer proposal in Canada may appear simple, there are a few more factors to take into account before choosing a course of action.

It’s important to understand that not all debts are eligible for inclusion in a consumer proposal. Debts that are secured, cannot be included in this list. These debts will still be fully your responsibility to pay off.

If you need more information about how to handle your debt or you don’t know where to start at all – it is best that you get a FREE CONSULTATION first about Debt Relief Program Services in Canada from Expert Finance Counselors to help you know your options.