Submitting a consumer proposal to your creditors

Summary

A Licensed Insolvency Trustee explains to Mary and Paul that a consumer proposal might be the way to resolve their financial situation. The trustee tells them how a consumer proposal is different from bankruptcy and what they need to do.

Transcript

(Soft music begins and continues in the background throughout the video. The blank screen has the Government of Canada logo at the top left and the Canada wordmark on the bottom right. A broad bar of dark grey opens up between the logo and wordmark, revealing in the centre the title, "Submitting a consumer proposal to your creditors." The title collapses, the logo and wordmark fade out, and the screen is blank again.)

(An illustration of a woman's face appears in the centre. She is smiling, and has short, styled hair. All the people in the video are represented by illustrations of their faces. The woman closes her eyes as if she is nodding "Hello," as all the people in the video do when they appear on screen. Then the woman's name, Mary, fades in below the illustration.)

Meet Mary.

Mary took a job right out of college

(Mary's eyes widen.)

but recently. . .

(Mary's smile changes to pursed lips and she looks worried.)

. . . she has had to take a lot of time off to care for her sick husband, Paul.

(An illustration of Paul's face zooms in to the right of Mary, with his name underneath. He has short hair.)

With reduced income and their debts mounting, they are now considering bankruptcy.

(Mary and Paul slide left and off the screen.)

Their first step was to visit a Licensed Insolvency Trustee,

(An illustration of a woman, the trustee, zooms in. She nods hello.)

a professional who is licensed by the Office of the Superintendent of Bankruptcy Canada.

To their surprise,

(The trustee moves to the left of the screen and the word bankruptcy appears to her right.)

the trustee told them that bankruptcy may not be necessary.

(A circle forms around the word bankruptcy and then a slash is drawn through it to become the "no" symbol.)

The trustee says that Mary and Paul could prepare

(The images zoom out to leave a blank screen.)

what is called. . .

. . . a "consumer proposal."

(The words "consumer proposal" appear along the top of the screen.)

This is an offer to creditors to pay back a percentage of what they owe

(Calendars, for the dates 2016, 2017, 2018, 2019 and 2020, appear one by one below the title "Consumer proposal.")

over a period of up to five years.

(The calendar pages move left and off the screen. The words disappear at the top of the screen, leaving the screen blank.)

There are advantages

(A box with a checkmark appears.)

to filing a consumer proposal, the trustee tells them. For example, they get to keep their possessions

(As the check box zooms out, a smaller one, also checked, appears with the words "Keep possessions" to its right.)

and the proposal binds all creditors

(Below the small check box, another checked box appears, with the words "Binds all creditors" to its right.)

to the agreement.

(The words and check boxes drop down and disappear.)

To get things underway, the trustee explains

(The trustee reappears. To her right, the heading "List of assets" appears, and then the assets are listed below the heading: house, car and boat.)

that Mary and Paul must provide a complete list of what they own and what they owe.

(The trustee zooms out and disappears, while the list of assets slides right and disappears off the screen.)

Using that information, the trustee will put a proposal

(An official-looking document, with the heading "proposal," appears.)

together based on their ability to pay.

The proposal will then be filed

(The proposal document tips right 90 degrees, and then inserts itself into a file folder labelled "Office of the Superintendent of Bankruptcy Canada.")

with the Office of the Superintendent of Bankruptcy Canada, the federal organization that regulates Licensed Insolvency Trustees.

Once it is filed,

(The file folder drops down. The proposal document pops up before the folder and proposal disappear off the bottom of the screen.)

Mary

(Mary appears to the left of the screen.)

and Paul

(Paul appears to Mary's right.)

will stop making payments directly to their unsecured creditors.

(Below Mary and Paul, a box with a checkmark appears beside the words "Stop paying creditors.")

The trustee also explains that, if creditors are garnishing her wages or suing them,

(Below the first check box, a box with a checkmark appears beside the words "Legal actions stop.")

those actions will stop, too.

(Mary and Paul zoom in and off the screen. The two lines with the check boxes drop off the bottom of the screen.)

Once the appropriate papers are filed with the Office of the Superintendent of Bankruptcy Canada,

(The file folder with the proposal, still labelled "Office of the Superintendent of Bankruptcy Canada," swings up from the bottom of the scree, straightening out before resting in the centre.)

the trustee will then submit the proposal to the couple's creditors.

(The file folder zooms out to the left to be small enough to insert itself into an old-fashioned mailbox that appears from the bottom of the screen. As the folder is inserted, the flag on the mailbox raises up to indicate that the mailbox contains mail.)

The creditors

(The mailbox zooms in and drops down and off the bottom of the screen.)

will then have 45 days

(A horizontal line near the bottom of the screen comes in from the left. As it reaches the centre, it draws an outline of the numeral four around a small triangle that appears above the line. The line continues to the right so that it forms the numeral forty-five in the centre of the screen and continues as a horizontal line off the screen to the right.)

to accept or reject the offer.

(The line starts to erase from the left, around the number forty-five and disappears off the right of the screen, leaving the screen blank.)

If creditors appear unsatisfied with the proposal, the trustee may also negotiate amendments

(The file folder with the proposal, no longer labelled, appears from the bottom of the screen.)

such as higher payments to creditors.

(A speech bubble appears to its right, with a dollar symbol and an arrow pointing up. The speech bubble bobs up and down a bit before it straightens out.)

But if the proposal is rejected,

(The file folder with the proposal zooms out a little and the speech bubble fades out and disappears.)

Mary

(Mary appears to the left of the smaller file folder with the proposal.)

and Paul

(Paul appears in between Mary and the file folder. A circle forms around the file folder with the proposal and then a slash is drawn through it to become the "no" symbol.)

are told they'll have to look at other options

(Two speech bubbles appear to the right of the file folder: the top one says "Option 01" and the other says "Option 02." They bob up and down, with the Option 01 bubble sometimes overlapping the Option 02 bubble.)

to solve their financial problems. This may include

(Just as the two speech bubbles stop bobbing and straighten out, a third one appears below them. It says "Bankruptcy." It bobs a little before straightening out too.)

declaring bankruptcy.

If the proposal is accepted

(The three speech bubbles shrink and disappear.)

Mary and Paul will then be responsible for making periodic payments

(The folder with the no symbol still showing swirls out of sight, leaving Mary and Paul to the left of the screen.)

to the trustee

(A broad green arrow with a dollar symbol in the middle is drawn from left to right, pointing to the trustee, who appears on the far right of the screen. Three undated calendars appear above the arrow and three appear below the arrow.)

who will use that money to pay the creditors.

Further,

(The arrow and calendars slide left and disappear behind Mary and Paul. A document appears in their place, with the word "Conditions" across the top.)

they will be required to adhere to any other conditions in the proposal.

(All images drop down, off the bottom of the screen.)

They will also have to attend two counselling sessions

(The words "They will have to attend" appear near the top of the screen. Below them appears a box with a checkmark beside the words "Counselling sessions.")

to help them get back on their feet financially.

(The words drop down, off the bottom of the screen. Six boxes with checkmarks appear, with Mary and Paul below them. A line frames Mary and Paul. A heavy chain is attached to the left side of the frame. The chain loops up toward the check boxes, and at the end is a ball labelled "Debts.")

If they meet the conditions,

(The ball swings down heavily. As it begins to rotates up toward the bottom of the frame around Mary and Paul, the link to the frame breaks and the frame shatters. The ball, chain and frame pieces drop down, off the bottom of the screen.)

they will be legally released

(The check boxes zoom out and disappear. Mary and Paul zoom in.)

from the debts that were included

(Mary and Paul slide right and off the screen.)

in the proposal.

Mary asks

(Mary appears on the left of the screen.)

about their credit rating.

(Beside Mary, five stars appear in a line across the screen. The one closest to Mary is gold but the other four are dark grey.)

Yes, it will be affected, she is told. But once the terms of the proposal are met,

(The stars move up over Mary's head. They are now all gold stars, and are set against a red background, like a banner. Paul appears to Mary's right and under the banner of gold stars.)

they will be able to start rebuilding their credit and their financial future.

(All images drop down, off the bottom of the screen.)

If you are facing

(A question mark pops up from the bottom of the screen, and bobs left and right.)

financial uncertainty, having a Licensed Insolvency Trustee

(The question mark zooms out and the trustee zooms in.)

prepare a consumer proposal for you is just one

(Four speech bubbles pop up around the trustee. The bubbles contain the numbers 1, 2, 3 and 4, representing the options. The speech bubbles bob slightly.)

of several options available.

(The speech bubbles and the trustee zoom out and disappear.)

Visit our website

(The URL www.canada.ca appears below a row of five different trustees, who have zoomed in one at a time. They alternate woman, man, woman, man, woman. The Licensed Insolvency Trustee at the left is the trustee who helped Mary and Paul.)

where you can use our searchable database to find a Licensed Insolvency Trustee, the only professional who can file a consumer proposal or bankruptcy application in your name.

This is one of a series of videos

(The screen fills with four boxes. The top left box says: "Discussing your options with a Licensed Insolvency Trustee." The top right box says: "What to expect if you file for bankruptcy." The bottom left box says: "Understanding the bankruptcy discharge." The bottom right box says: "Bankruptcy and surplus income payments." A cursor appears to be clicking on the top left box.)

available on our website.

(The screen fades out. The Canada wordmark appears in the centre of the screen. The music fades out. The wordmark eventually dissolves.)

Related videos

Related information

Date modified: