Chaning a Bankruptcy to a Proposal in Ontario

Question: Can you change from a bankruptcy to a consumer proposal after property has been sold by the bank that held the mortgage ? and there is still unsecured debt owing? THANKS

Answer: Yes, it is possible to file a consumer proposal while you are bankrupt. If the proposal is accepted, the bankruptcy is annulled, and you can deal with your debts by completing the proposal.

However, only debts that existed when you filed bankruptcy will be included in the consumer proposal, since it becomes, in effect, an extension of the bankruptcy. This is a complicated area of insolvency law, so you should consult with your bankruptcy trustee to determine if this is possible in your situation.

Labels: bankruptcy Ontario, bankruptcy trustee, consumer proposal