When you file a Consumer Proposal in Ontario, there is a hold on all legal proceedings that your creditors can take against you. Interest on all debts stop as of the day the court accepts the Consumer Proposal and confirms the appointment of your Licensed Insolvency Trustee who acts as the Administrator of your proposal. If the creditors accept the offer in your proposal, then your only obligation is to make payments in accordance with the terms of the proposal, which may or may not include an interest factor. If the creditors refuse your proposal, then you have options. Normally, your trustee will contact the creditors who refused to agree to your proposal and ask what they would accept in payments to change their decision. This may take several months of negotiating back and forth. You want to pay as little as possible. Your creditors want as much as possible. Somewhere in the middle is what is reasonable in these circumstances.
In cases where no proposal can be negotiated with the creditors and the proposal is refused by a majority of creditors, then you, as the person filing would be back at square one. The full rights of all creditors are reinstated and their right to claim interest is back to the day you filed the Consumer Proposal when the interest was stopped. If you subsequently file another proposal or a bankruptcy, the interest stops again.
Contact Rumanek & Company Ltd. for more information on bankruptcy in Ontario and debt solutions. Please fill out the bankruptcy evaluation form. To learn more please visit our YouTube Channel. Rumanek & Company have been helping individuals and families overcome personal bankruptcy in Ontario for more than 25 years.