How will COVID-19 affect my consumer proposal?

If you are currently having difficulty making your payments on a consumer proposal, you may have some opportunities. The Bankruptcy and Insolvency Act allows a consumer debtor to fall behind on no more than three monthly payments before the consumer proposal is deemed to be in default.

If you are struggling to make your payments, you should immediately contact your Licensed Insolvency Trustee to review your specific situation. If you have not missed any payments, you may have the option to reduce, or skip, a few payments.

If you are already behind or in arrears on any of your consumer proposal payments. Then you should consider what expenses you could reduce to be able to maintain your proposal payments, even if it is a partial monthly payment.

If you become three monthly payments behind or in arrears of your consumer proposal payments, your consumer proposal will automatically be deemed to be in default. This means your creditors will be allowed, to start collection activities again. Given the current COVID-19 situation that might not be your biggest concern.

However, if you default on your consumer proposal, you are not eligible to file another consumer proposal, without the Bankruptcy Court in your province giving you consent.

This means that when things in Canada return to normal, post COVID-19, your ability to deal with your debts will be limited.

If COVID-19 is having a negative impact on your income, you should be in immediate contact with your Licensed Insolvency Trustee to review your consumer proposal and to discuss the options that are available to you.

The objective should be to find the best solution based on your situation that helps you provide for you and your family and to keep your consumer proposal in good standing.

Stay safe and healthy. Stay home (whenever possible), wash your hands, and keep your distance from those around you. These are stressful times but no one should feel alone with these challenges. We really are in this together.