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Consumer Proposals & Division I Proposals. Avoiding Bankruptcy.
To get a consumer proposal started you consult with a local bankruptcy trustee and provide her with all of your financial information so that the trustee may formulate a plan for allowing you to repay a portion of your debts. Consumer proposals in Nova Scotia can:
• allow an individual to repay a portion of their debt;
allow a person more time to repay their debt; or
provide a combination of both of these.
For a proposal to be accepted, the creditors that you owe money to must receive more financial return that if you were to go bankrupt.
For most consumer proposals, you can keep everything you own. As soon as a consumer proposal has been accepted your creditors will not be allowed to contact you or make collection attempts.
Personal Proposal Types
An individual may make two different types of proposal to their creditors:
• Consumer Proposals - When a person owes under $250,000 (mortgage not included), they are eligible to make a consumer proposal;
• Division I Proposals - If you owe more than $250,000, or you would like to make this type of proposal, you can be eligible for a Division I (Ordinary) proposal.
Both a consumer proposal and a Division I proposal give you a “stay of proceedings”, which protects you from your creditors. The record of the consumer or Division I proposal is removed from your credit bureau report three years after the terms of the proposal is satisfied.