Under the Bankruptcy and Insolvency Act, you may make a proposal or compromise to your creditors.
This is usually a cents on the dollar compromise and generally consists of one monthly payment.
Your offer may be to compromise the total amount you owe your creditors or extend the time you have to pay your debts in full. Instead of monthly payments to your creditors, you could also offer to cash in certain assets (i.e. RRSPs) to pay a portion or all of the debts. However, before doing that, the Trustee will evaluate the merits of doing so.
Only a Licensed Insolvency Trustee can assist you in making a fair offer to your creditors. The filing of the proposal stops unwanted calls from creditors, stops your wages from being garnisheed, stops all lawsuits that may have been started and prevents any new ones from starting and allows you time to make arrangements to pay your creditors what you can afford. And yes, it can include any government debt. A flowchart setting out the timelines and process for a consumer proposal can be found here.
In order to qualify for a consumer proposal you must owe less than $250,000 not counting mortgages registered against your principal residence. If you owe more than $250,000 over and above your mortgage, you may still file a proposal, but different rules will apply.
The first step in the process is to contact us for a free initial, confidential consultation about your financial options.