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INFORMAL ARRANGEMENTS
This is an arrangement
with your creditors on an informal basis, which might include making
full payment (or less) of your debts to your creditors over time. This
process has the following difficulties:
- Getting 100%
agreement from your creditors.
- There is no binding
timetable that forces creditors to decide.
- Creditors may still
refuse to be part of the process and still harass you.
This process is an act
of bankruptcy and could be used by your creditors to request the
courts to put you into bankruptcy.
FORMAL
ARRANGEMENTS-BINDING BY LAW
Under the Bankruptcy
& Insolvency Act, there is a procedure called a Proposal which, if
passed by your creditors, will bind your creditors and avoid
bankruptcy.
The key points to
making a formal Proposal successful are:
- Obtaining the
acceptance of 50% plus 1 creditor, representing over 66% of proven
creditor claims. Under a formal Proposal, you do not require
100% acceptance by your creditors.
- The payment to
creditors under a Proposal must be greater than they would receive
from a distribution of your assets in a bankruptcy.
For further
information, see Consumer
Proposals.
BANKRUPTCY ~ LAST
RESORT!
If there is no
chance of making a successful arrangement with your creditors, then
bankruptcy may be a last resort.
Click here to download a
personal bankruptcy/consumer proposal questionnaire.
If you experience
difficulty in downloading the file, please
e-mail
or contact us.
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