What are the criteria for a consumer proposal in Canada?

_{consumer proposal, insolvency trustee, Quebec}

Thinking of a consumer proposal in Canada? Picture it as extending an olive branch to creditors. Key points: Owe $1,000-$250,000 (excluding your home), show you’re insolvent, and engage a licensed insolvency trustee. Must not have had a proposal in 5 years or bankruptcy in 7.

_{Explore your consumer proposal options with an insolvency trustee.}

Question

What is the criteria for a consumer proposal? I need to make sure I meet the necessary requirements before moving forward. Knowing the criteria upfront can save me time and effort. What do I need to qualify?

From: Anonymous Question, Quebec (QC)

Debt Insiders Answer

To explore a consumer proposal in Canada, think of it as extending an olive branch to your creditors, but there are some key things to keep in mind. First off, you need to owe between $1,000 and $250,000, not counting the mortgage on your home sweet home. Next, your financial picture should show that you’re insolvent—meaning your debts are piling up faster than your assets can handle. You’ll also need a licensed insolvency trustee, your trusty financial sidekick, to help craft a plan that’s reasonable for everyone involved. Remember that you shouldn’t have submitted a consumer proposal in the last five years or declared bankruptcy in the past seven years. The creditors and banks helped put you in this position and should consider your proposal.

From: Anonymous Question

Office of the Superintendent of Bankrupty (OSB) Answer

To qualify for a consumer proposal in Canada, you must meet the following criteria:

1. You must be an individual (not a corporation).
2. Your total unsecured debts must be less than $250,000, excluding any mortgage on your principal residence (Bankruptcy and Insolvency Act, RSC 1985, c. B-3, Section 66.1).
3. You must be insolvent, meaning you cannot pay your debts as they become due or your total debts exceed the value of your assets (Bankruptcy and Insolvency Act, RSC 1985, c. B-3, Section 2).
4. You must propose a plan to your creditors that is reasonable and can be fulfilled without the intention of declaring personal bankruptcy (Bankruptcy and Insolvency Act, RSC 1985, c. B-3, Sections 66.1 and 66.2).
5. The proposal must be filed through a Licensed Insolvency Trustee.

Ensure that you assess these conditions before moving forward with your consumer proposal.

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 the criteria for a consumer proposal in Canada:

1. What is the debt limit for filing a consumer proposal?

• The debt limit is less than $250,000 in total unsecured personal debts, excluding the mortgage on the principal residence.

2. What types of debts are included in a consumer proposal?

• Any unsecured debt, including credit card debt, unsecured lines of credit, personal loans, payday loans, and most tax debts.

3. What are the eligibility criteria for a consumer proposal?

• You must be an individual, live in or do business in the country, owe at least $1,000 in unsecured debt, and have the income to make the proposal payments.

4. Can secured debts be included in a consumer proposal?

• No, debts secured by assets such as mortgages, second mortgages, secured lines of credit, and car loans are excluded from being settled in a consumer proposal.

5. Do I need to be up to date on my tax filings to include tax debts in a consumer proposal?

• Yes, you must be up to date on your tax filings for the Canada Revenue Agency (CRA) to consider your proposal.

References

_{Table of article references}