We have seen numerous situations over the years where it made sense for a person in bankruptcy to annul (effectively cancel) their bankruptcy through filing a consumer proposal. Although many people feel that once they have filed bankruptcy, they must remain bankrupt, filing a consumer proposal (which is approved by the companies who are owed money), is one way to annul (cancel) a bankruptcy.
It is important to know that if you are bankrupt and want to annul the bankruptcy by filing a consumer proposal, that only debts (money you owe) which were owed prior to the bankruptcy can be included in the consumer proposal. In other words, you cannot add debts which happened after the bankruptcy was filed even though the consumer proposal was not in place yet. It is also important to know that even if your bankruptcy which has not yet been completed was filed with a different trustee, we can still help you file a consumer proposal which will annul (cancel) that bankruptcy.
Reasons why to annul a Bankruptcy with a Consumer Proposal
Here are some examples of where it may make sense to annul a bankruptcy by filing a consumer proposal:
- A bankrupt received a large inheritance and for her to gain access to these funds quickly she filed a consumer proposal. It made no sense for her to have a bankruptcy on her record if her debts were to be paid in full
- A bankrupt found a good paying job and based on that increased income; the bankrupt was required to pay $1,000 per month for 21 months (about 2 years). As a result, the bankrupt decided to propose $500 over 60 months (about 5 years), which from a cash flow basis, made things much easier than continuing to make the bankruptcy payments
- A bankrupt had investments which she thought were registered retirement savings plans (RRSP), protected and unable to be taken by the Trustee. The RRSP company told us they were unregistered and therefore would be sent to the trustee. To preserve these funds for her retirement, the bankrupt decided to file a consumer proposal instead
As these examples show, it is important to remember that you should come and talk to us if you are looking at ways to explore annulling a bankruptcy that has not yet been completed. We can review your situation and give you advice on your rights and what actions you might wish to take. If you’d like to meet with one of our professionals, just click the FREE CONSULTATION button, below, or give us a call today. We are here to help you!