Many debtors, after lengthy financial struggles, finally see the light at the end of the tunnel when their Consumer Proposals are accepted by creditors. Most of them move on with their lives successfully. However, a few of them somehow default on the proposals and experience the previous financial nightmares – such as collection calls and garnished wages – again. This calls for a revival of the annulled Consumer Proposal.
For those who miss payments on the Consumer Proposal, the good news is that there is a revival process after Amendments, which came into effect on September 18, 2009.
If a Consumer Proposal (other than a Consumer Proposal filed by a bankrupt) is annulled, it may be possible for it to be revived if the debtor has made up all of the missed payments, and the Administrator considers it appropriate for the proposal to continue.
Automatic Consumer Proposal Revival by the Administrator
The Administrator may, within 30 days of the deemed annulment, send to the creditors and the Office of the Superintendent of Bankruptcy (the “OSB”) a notice informing them that the consumer proposal will be automatically revived 60 days after the day on which it was deemed annulled, unless a notice of objection is filed with the Administrator.
The revival of a Consumer Proposal does not prejudice the validity of anything duly done by a creditor in the exercising of its rights between the deemed annulment and the revival (BIA s. 66.31(11)).
If a notice of objection is filed within the 60 day period, then the consumer proposal remains annulled. The administrator must, without delay, send a prescribed notice to the OSB and creditors that the consumer proposal is not going to be automatically revived (BIA s. 66.31(8)).
Consumer Proposal Revival by Application to the Court
The Administrator may, at any time, apply to court for an order reviving a Consumer Proposal that was deemed annulled. The application must be on notice to the OSB and the creditors.
Ideally, the consumer debtor should remit to the Administrator an amount sufficient to cure the default as soon as possible, and prior to the court hearing.
The court may revive the Consumer Proposal if it considers it appropriate to do so in the circumstances presented (BIA s. 66.31(9)). The court may also revive the Consumer Proposal on terms that it considers appropriate. There are cases that the court refused to revive the consumer proposal, because the consumer debtor was not able to bring the payments up to date, but granted the consumer debtor leave to file another Consumer Proposal.
If the court refuses to revive the Consumer Proposal, then the Consumer Proposal remains annulled and creditors can continue their collection efforts.
Learn more about Consumer Proposals
Would you like to know more about how a Consumer Proposal can help you to get out of debt? At A. Farber & Partners we offer free consultations to inform you about all debt relief options that are available to you.