HOW FLEXIBLE ARE CONSUMER PROPOSAL PAYMENTS?

Consumer Proposals can be made provided that the total of all debts excluding a mortgage on a principal residence do not exceed $250,000. That value does, however, include car loans and mortgages on properties that are not a principal residence.

Proposals can be very creative, for example they can made based on a lump sum payment; a combination of lump sum and monthly payments; periodic payments; or the outcome of a future event that may may be unknown such as the sale of a property with the “net proceeds” going to the proposal and so on.

We have helped a debtor to file a proposal that allowed for payment variations based on future income, if the income went up the payments went up, if the income dropped so did the corresponding payments.

Once in a proposal the terms can be varied by the trustee (administrator) calling a meeting of creditors to consider an amendment to the proposal. So if the debtor lost a job or suffered some other form of financial setback the creditors may accept a reduced payment level or a shortened term.