After your Consumer Proposal is Accepted

You will probably experience immediate relief because the payments needed to service your debt will be considerably less—you are no longer making the majority of your monthly payments on interest instead of the principal. There is also the mental relief of knowing the date by which you will be debt free. Take advantage of this time to make whatever changes are necessary to avoid ending up in the same situation (see After Bankruptcy: The 3 Steps to Financial Fitness).

Over the repayment period, you are allowed to miss up to two payments, which will be added to the timeline by your licensed insolvency trustee, extending the consumer proposal by two months. If you miss a payment, contact your licensed insolvency trustee at once, especially if you are having a hard time making ends meet. You can discuss applying for an amendment to the terms of your proposal. The consequences of not doing so can be severe.

If you miss three payments, your consumer proposal is annulled by the Court. This means that the creditors listed on the proposal can apply to garnish your wages. Also, interest charges are added to your debts—going back to the date that you applied for the proposal. Just the interest can add thousands of dollars in brand new debt which you are legally required to repay. At this point, you may review your options with your licensed insolvency trustee and decide that declaring bankruptcy is the best decision.