Can I File A Consumer Proposal After Bankruptcy?

The short answer is “yes”. However, there are two different circumstances where you would file a consumer proposal after bankruptcy.

Filing After Bankruptcy – You’ve Been Discharged

In the first instance, if you filed personal bankruptcy and obtained your discharge from bankruptcy you would file a consumer proposal as anybody else normally would.

You Haven’t Been Discharged from Bankruptcy

In the second instance, if you filed bankruptcy but did not obtain your discharge from bankruptcy you would need to obtain the permission of the creditors of your bankruptcy estate (or the estate inspectors, if any) to allow you to file a consumer proposal.

Moreover, the consumer proposal would have to be made to the creditors in your bankruptcy estate, not towards any new debts you may have incurred since you filed your bankruptcy.

Here is the process of filing a consumer proposal where you are still in bankruptcy:

• Your Trustee will need to contact either the estate inspectors in your bankruptcy or if there are no inspectors, the estate creditors. A formal meeting would be held a the Trustee’s office with the purpose of obtain permission from the inspectors or the creditors, as the case may be, to allow you to file an “in-bankruptcy” consumer proposal.

• Your Trustee will then work with you to draft a consumer proposal to your creditors, which is then filed with the Office of the Superintendent of Bankruptcy.
• Your creditors have 45-days to review the proposal and at the end of the 45-day period after the proposal was filed with the OSB, the Trustee will compile and review the voting letters received. There are 3 possible scenarios:
  • If no voting letters were received, the creditors are “deemed” to have accepted the proposal.
  • If those creditors voting “no” comprise less than 25% of the value of claims filed, the creditors are deemed to have accepted the consumer proposal.
  • If those creditors voting “no” comprise more than 25 percent of the value of claims filed, the Trustee is required to hold a meeting of creditors. Creditors will usually vote “no” because they want more money. Therefore, a meeting of creditors would be held to discuss what the debtor would have to offer in a consumer proposal before it would be accepted by the dissenting creditor(s).
• Once your creditors have accepted your proposal, there is a 15-day waiting period that allows any interested parties (e.g., creditors, the Trustee, or the OSB) to request that the Bankruptcy Court review the . Once that 15-day period expires, the is deemed to be accepted by court.
• Once your proposal is deemed to be approved by your creditors and the Bankrutcy Court, your bankruptcy is annulled.
• Once you’ve completed the terms of your consumer proposal, the balance of your debts are discharged.

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