Ontario Personal Proposals - Consumer Proposals; Avoiding Bankruptcy
The way Ontario personal proposals work is that you meet with a trustee, who will use the information you provide to come up with a plan that will allow you to pay only a part of what you owe. Ontario personal proposals can:
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have you pay off only a portion of your debts;
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extend the time you have to pay off the debt; or
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provide some combination of both.
To be acceptable, your creditors must receive a greater financial return under a personal proposal than if you go bankrupt.
Often with Ontario personal proposals you can keep all of your assets. Once your personal proposal is filed, your creditors must stop all collection action and the trustee will deal with your creditors.
Types of Personal Proposals
There are two types of personal proposals available to individuals:
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If you owe less than $75,000, consumer debt, to your creditors (not counting a mortgage), you may be eligible to file a consumer proposal;
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If you owe more than $75,000, or you prefer, the other type of personal proposal you can file is an Ordinary or Division I proposal.
Both types of Ontario personal proposals give you a “stay of proceedings” or protection from your creditors.
