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What is a division one proposal?

A Division 1 proposal is a formal procedure governed by the Bankruptcy and Insolvency Act and is available to businesses and individuals — there is no limit with respect to how much money is owed.

 Process Set up an appointment with Gregory and his team. Gregory will walk you through the process of filing a DIV 1 proposal and help you find the right trustee for the job. A trustee is someone who will work with you and your adviser to develop a Division 1 proposal that works for both you and your creditors. 

Once completed the trustee will file the proposal, or the notice of intention to file a proposal, on your behalf (with the Office of the Superintendent of Bankruptcy). Once you submit the notice of intention to file a proposal, or your proposal, you will stop making any payments directly to your unsecured creditors, any salary garnishments will stop and lawsuits against you by creditors will be stayed (stopped). As well, secured creditors have the option of being part of a Division 1 proposal. 

Responsibilities of the Debtor 

· disclose all of his or her assets (property) and liabilities (debts) to the trustee; · attend the first meeting of creditors; 

· attend two counselling sessions; 

· advise the trustee in writing of any address changes; and 

· generally assist the trustee in administering the proposal. 

Within five days of filing, a copy of the notice of intention is sent to all known creditors (including a report on the affairs of the debtor). The proposal itself must then be filed within 30 days after the notice of intention, unless the Court has granted an extension. 

The trustee will set up a meeting of creditors where creditors will vote to accept or reject the proposal. At the meeting of creditors, the trustee must also present the creditors with an estimate of what the creditors would realize under a bankruptcy compared with the amount they are being offered under the proposal. 

· If at least 66.6 percent (two thirds) in dollars and 2/3’s of eligible creditors who vote approve the proposal, the proposal is accepted by the creditors. The proposal must then be approved by the Court. 

· If the proposal is accepted by the creditors and approved by the Court, all unsecured creditors are bound by the proposal. 

· If the proposal does not receive the required votes, you are immediately declared bankrupt as of the date of the meeting of creditors. If your Division 1 proposal is accepted, 

· you will be responsible for paying either a lump sum or periodic payments to the trustee and adhering to any other conditions in the proposal; and 

· you retain your assets so long as you make your payments to your secured creditors. 

If you meet the conditions in the proposal in full, you will be legally released from the debts included in the proposal. If the terms of the proposal are not honored, then the trustee or a creditor may apply to the Court for the proposal to be annulled and you’ll be placed into bankruptcy. 

Consolidate Debt

Everyday Canadians struggle with their monthly payments robbing from Peter to pay Paul, living paycheck to paycheck, never knowing if you’re going to have enough to make it to the next pay. It’s a reality all too common but it doesn’t have to be this way. 

How We Help

Our debt counselling professionals will answer all of your questions and provide you with all of your options to consolidate. Remember there is never any pressure or obligation on your part to use our services. Its safe, 100% confidential and never any obligations. 

Free Assessment

Complete our free online assessment and have your options emailed directly to you. The assessment takes less than 10 minutes and your results are emailed to you within 24 hours.

Everyday thousands of people in Canada ask for help from debt professionals. You’re not alone!

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