Proposal in bankruptcy
A proposal in bankruptcy is not a bankruptcy.
A proposal is when the insolvent debtor offers to repay, in whole or in part, the amounts owing to his creditors.
The two types of proposals are:
- Division I (commercial proposal)
- You can file this type of proposal if you are:
- the insolvent person
- a receiver, within the meaning of the Bankruptcy Insolvency Act, subsection 243(2), but only in relation to an insolvent person
- a liquidator of an insolvent person's property
- a bankrupt
- a trustee of the estate of a bankrupt
The amount of debt determines the applicability. This type of proposal is also known as the reorganization proposal.
- Division II (consumer proposal)
This type of proposal can only be filed by an individual who is bankrupt or insolvent. The amount and type of debt that the debtor owes determines the applicability.
You have to send a copy of the proposal to your Insolvency Intake Centres.