Alberta Bankruptcy Proposals to Creditors

	Bankruptcy Proposals to Creditors

What is a Proposal?

	A proposal is a legal process which enables you to make an offer to your creditors to modify your payments or to pay them a percentage of what you owe. A proposal allows a fresh start without going bankrupt. bankruptcy, bankruptcy, Calgary, Edmonton, Red Deer, Alberta, Canada, proposal, proposals, creditor, creditors
		Briefly the steps are:
		Choose a Trustee such as Alger & Associates Inc.
		The Trustee will help you prepare a Statement of Affairs which lists all of your assets, creditors, income, expenses and other pertinent information.
		Your finances will be reviewed and the Trustee will assist you in preparing a proposal to your creditors.
		After you make your proposal, most creditors are no longer able to pursue you for collection of their accounts.
		Public utilities may not discontinue service.
		You make your payments to the Trustee who will pay your creditors until the terms of your proposal have been met.
		You will be required to attend two financial counselling sessions.
		Once you have met the terms of your proposal, you will receive a document stating that you completed your proposal and you will have no further obligation for the debts covered in your proposal.

	Are there different types of proposals?
		Yes, there are two types: consumer proposals and proposals under Division 1 of the Bankruptcy and Insolvency Act.

	Who can make a consumer proposal?
		An insolvent person whose debts are less than $75,000, not including their home mortgage.

What are the fees in a consumer proposal?

The fees are set by the government and are the same across Canada.

How is my consumer proposal accepted by the creditors?

Your creditors have 45 days in which to respond to your proposal. If no creditors respond or your creditors vote yes, your proposal is approved pending Court approval. However, if more than 25% of your creditors vote no a meeting must be held in which your creditors vote whether or not to accept your proposal.

What happens if my proposal is not accepted?

You will no longer be protected by the Bankruptcy and Insolvency Act and your creditors will be able to take legal steps to recover their debts from you. The option of filing an Assignment in Bankruptcy is still available.

What if I owe more than $75,000?

You may file a proposal under Division 1. If this proposal is rejected by your creditors, automatic bankruptcy results. The fees are based on the Trustee's time charges as opposed to a fee set by the Government.

Are my spouse's assets or debts included in my bankruptcy or proposal?

No. Only assets owned by you are included. If assets are jointly owned, then your portion may have to be sold. If most of your assets and debts are joint with your spouse, then it may be appropriate for a joint bankruptcy or consumer proposal to be made.

Do I require a lawyer if I go bankrupt or make a proposal?

Generally, you do not require a lawyer to go bankrupt. If you feel the need for legal advice and cannot afford a lawyer, legal aid may be available.

What about my secured creditors if I go bankrupt?

In most cases, bankruptcies and consumer proposals do not affect the rights of secured creditors. If a creditor has a valid security against your property (i.e., car or house), and if you can afford monthly payments, financial arrangements may be made with the secured creditor to keep the property and continue paying for it.

Our qualified Alberta trustess are familiar with all aspects of Canadian bankruptcy law. We currently have offices in Calgary, Red Deer, and Edmonton, Alberta, Canada.

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This web site is for general information purposes only. The major sources of reference were the Bankruptcy and Insolvency Act of Canada and the Civil Enforcement Act of Alberta.
Although every reasonable effort has been made to ensure the accuracy and timeliness of the information contained herein, no individual or organization involved in the preparing of this information accepts any contractual or any other form of liability for its content or from any consequence arising from its use.

	What are the fees in a consumer proposal?
		The fees are set by the government and are the same across Canada.

	How is my consumer proposal accepted by the creditors?
		Your creditors have 45 days in which to respond to your proposal. If no creditors respond or your creditors vote yes, your proposal is approved pending Court approval. However, if more than 25% of your creditors vote no a meeting must be held in which your creditors vote whether or not to accept your proposal.

	What happens if my proposal is not accepted?
		You will no longer be protected by the Bankruptcy and Insolvency Act and your creditors will be able to take legal steps to recover their debts from you. The option of filing an Assignment in Bankruptcy is still available.

	What if I owe more than $75,000?
		You may file a proposal under Division 1. If this proposal is rejected by your creditors, automatic bankruptcy results. The fees are based on the Trustee's time charges as opposed to a fee set by the Government.

	Are my spouse's assets or debts included in my bankruptcy or proposal?
		No. Only assets owned by you are included. If assets are jointly owned, then your portion may have to be sold. If most of your assets and debts are joint with your spouse, then it may be appropriate for a joint bankruptcy or consumer proposal to be made.

	Do I require a lawyer if I go bankrupt or make a proposal?
		Generally, you do not require a lawyer to go bankrupt. If you feel the need for legal advice and cannot afford a lawyer, legal aid may be available.