What occurs after 45 days in a consumer proposal?

_{consumer proposal, Licensed Insolvency Trustee, Alberta}

Once your consumer proposal hits day 45, creditors review it. Approval makes it legally binding, halting creditor actions and simplifying communications via your Licensed Insolvency Trustee. Stick to payments; proposals last 3-5 years, offering relief and a fresh start.

_{Your consumer proposal offers debt relief through an LIT.}

Question

What happens after 45 days of consumer proposal? I want to know what to expect a bit further down the line after starting a consumer proposal. What are the key changes or milestones after those first 45 days?

From: Anonymous Question, Alberta (AB)

Debt Insiders Answer

Once you pass the first 45 days of your consumer proposal, your creditors will get a chance to either accept or decline it during a possible meeting. If they give it the green light, your consumer proposal turns into a legally binding deal, letting you start the payments you promised to your Licensed Insolvency Trustee (LIT). At this point, your creditors must halt any legal actions for the debts you’ve included, giving you some breathing room from those pesky collection calls. Plus, you’ll no longer need to chat with creditors directly since all communication flows through your LIT, making debt management a whole lot smoother.

If your proposal gets the thumbs up, expect a shift in your financial stress levels for the better. Just remember, sticking to your payment schedule is key! Slacking off could mean your proposal gets canceled. Usually, wrapping up a consumer proposal takes between three to five years if you keep your end of the bargain. During this period, your LIT will be your right-hand man, offering ongoing support and guidance until your debts are officially off your back, allowing you to move forward with a fresh financial start.

From: Insider Scott

Office of the Superintendent of Bankruptcy (OSB) Answer

After 45 days of filing a consumer proposal, you can expect several key developments:

1. Creditor Meeting: Creditors may call a meeting to discuss the proposal, as outlined under Section 66.32 of the Bankruptcy and Insolvency Act. This is usually a crucial milestone, as it provides an opportunity for creditors to vote on the proposal.

2. Voting on Proposal: By day 45, creditors will have had time to consider the proposal and vote on it. The results of the vote will determine whether the proposal is accepted or rejected, according to Section 66.16 of the Bankruptcy and Insolvency Act.

3. Proposal Acceptance or Rejection: If accepted, the terms agreed upon will follow through for the duration specified in the proposal. If rejected, you may need to consider other options such as bankruptcy or negotiating terms directly with your creditors.

4. Automatic Stay of Proceedings: From the moment the consumer proposal is filed, an automatic stay on collection actions persists, preventing creditors from pursuing any legal action against you until the proposal is resolved (Section 69 of the Bankruptcy and Insolvency Act).

5. Modifications to the Proposal: Should the creditors seek changes or modifications during their discussions, you may need to renegotiate terms, as allowed in regulation under the Consumer Proposals Regulations, Section 14.

6. Required Payments: You are required to begin making any court-ordered payments as prescribed in the proposal once it is accepted, ensuring compliance with the terms.

These steps mark significant milestones in the consumer proposal process and may influence your financial situation moving forward.

From: This answer is provided by scanning the OSB Bankruptcy & Insolvency Act and related directives

Related Questions

Here are the top 5 most frequently asked questions related to what happens after 45 days of a consumer proposal, based on common queries and concerns:

1. What happens if my creditors accept the consumer proposal after 45 days?

• If a majority of creditors (by dollar value) vote in favor, the proposal is accepted and becomes legally binding.

2. What happens if my creditors reject the consumer proposal after 45 days?

• You can renegotiate the terms, consider other debt solutions, or file for bankruptcy.

3. Do I need to attend a meeting of creditors after the 45-day voting period?

• A meeting is required if at least 25% of your unsecured creditors (by dollar value) request one, but this is not always necessary.

4. When does the consumer proposal take effect after the 45-day period?

• The proposal takes effect 60 days after filing if it is accepted by the creditors and not subject to a court review.

5. What are my obligations once the consumer proposal is accepted after the 45-day period?

• You must make the agreed-upon payments, attend two financial counselling sessions, and comply with any other requirements outlined in the proposal.

If you have a question about debt see our debt questions or ask your own debt related question.

References

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