i've fallen behind in my consumer proposal payments
consumer proposal

I’m Behind in My Consumer Proposal Payments!

A reader asks

I filed a Consumer Proposal back in April where I’ve been paying $175 biweekly. However, I ended up losing my job back in July and the payments after that were coming out of my savings. I am now down to the last $100 to my name, literally.

The next $175 payment is scheduled to be paid in a week’s time, and needless to say, that ain’t going to happen thanks to my broke ass. I filed for Employment Insurance yesterday (I’m stupid and don’t know why I didn’t think of doing it sooner), so there is a possibility it may be approved and I’d get some funds out of that.

I have tried so hard to land a new job since July, been on a few interviews, and looks like I may have finally landed a warehouse job pending a successful background check, but I have NO idea how long that whole process is going to take.

My question is, if I speak to my Consumer Proposal trustee and explain the situation to her, would there be any way for them to put the next couple of $175 payments on hold until I’m back on my feet again?

I realize that worst case scenario I would have to claim bankruptcy and that scares the crap out of me…IF it does come to that, would bankruptcy be the end of me and how badly would it affect my life?

Our reply

Your proposal will only be annulled if you fall three months behind in payments. So long as you’re not three months in arrears your proposal is in good standing.

So if your proposal terms were $175 bi-weekly, you’d have to be behind $1,050 in payments before your proposal is annulled (i.e., $175 x 2 x 3 months).

Inform your Trustee of your situation so they’ll understand why you may fall behind in your payments. It’s important that you keep them apprised of your situation.

Hopefully you can get your EI or new job within the next 90 days so you can catch up on the payments you’ll be missing while waiting for money to come in.

Victor is the President of Fong and Partners Inc. He is a Licensed Insolvency Trustee and Chartered Professional Accountant. With over 20 years of experience in the insolvency field, Victor has been involved in both corporate and consumer insolvency engagements. Previously with a large national firm, Victor founded Fong and Partners Inc. in 2007 so that he could dedicate his professional life to help people from all walks of life to deal with their debt.