To get a personal proposal started you meet with a Quebec 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. Personal proposals can:
have you pay off only a portion of your debts;
extend the time you have to pay off the debt; or
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 personal proposals you can keep all of your assets. Once your personal proposal is filed, your creditors must stop all collection action and the Quebec trustee will deal with your creditors.
Types of Personal Proposals
There are two types of personal proposals available to individuals:
Consumer Proposals - If you owe less than $75,000 in consumer debt (not counting a mortgage), you may be eligible to file a consumer proposal;
Division I Proposals - If you owe more than $75,000, or you prefer, the other type of personal proposal you can file an Ordinary or Division I proposal.
Both types of personal proposals give you a “stay of proceedings” or protection from your creditors. The record of the consumer or Division I proposal is removed from your credit bureau report three years after the terms of the proposal is satisfied.
