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). This type of proposal can be filed by:
- the insolvent person
- a receiver, within the meaning of the Bankruptcy Insolvency Act, subsection 243(2), but only in relation to an insolvent person's property
- a liquidator of an insolvent person's property
- a bankrupt
- a trustee of the estate of a bankrupt
Applicability is determined by the amount of debt and also known as the reorganization proposal.
- Division II (Consumer Proposal). This type of proposal can only be filed by a natural person who is bankrupt or insolvent. Applicability is determined by the amount and type of debt owed by the debtor.
You have to send a copy of the proposal to your Insolvency Intake Centres.
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