September 5, 2017

Consumer proposals can be revived – don’t panic there are options.

If you fall behind on your payments under a proposal you shouldn’t panic.  Consumer proposals can be revived in one of two ways – first of all they can be revived automatically by the Administrator (Trustee) if you bring your payments up to current status within the requisite time frame.  Secondly they can be revived by court order at a time that exceeds the timeline set out in the Bankruptcy & Insolvency Act.

Section 66.31(6) of the Act reads:
Notice of possibility of consumer proposal being automatically revived

(6) In the case of a deemed annulment of a consumer proposal made by a person other than a bankrupt, if the administrator considers it appropriate to do so in the circumstances, he or she may, with notice to the official receiver, send to the creditors – within 30 days, or any other number of days that is prescribed, after the day on which the consumer proposal was deemed to be annulled – a notice in the prescribed form informing them that the consumer proposal will be automatically revived 60 days, or any other number of days that is prescribed, after the day on which it was deemed to be annulled unless one of them files with the administrator, in the prescribed manner, a notice of objection to the revival.

Another option for debtors who are falling behind because of a material change in circumstances is to ask your Administrator (Trustee) to convene a meeting of creditors to amend the proposal payments to a lower amount.  Creditors will often agree if they believe that you are acting in good faith.  It is also possible to construct a proposal that allows for reduced payment during periods of seasonal layoff.  Your proposal repayment terms can be as creative as your Administrator (Trustee).