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What Happens If My Consumer Proposal Is Annulled?

Have you filed a consumer proposal to help you manage mounting debt? As inflation surges, keeping up with payments can be difficult. If you’ve missed several payments, you may be risking annulment. Here’s what you should know.

a man sitting in a dark room looking depressed because his consumer proposal was annulled

The Consequences of An Annulment

Should your consumer proposal be deemed annulled due to missed payments or other circumstances, your consumer proposal is then no longer in force, and your creditors can resume their collection efforts against you.

What To Do If Your Proposal Is Annulled

If your consumer proposal is annulled, consult a licensed insolvency trustee (LIT) immediately to determine your options. In some cases, you can revive the proposal within 30 days of the annulment. Beyond this period, you must go to court to revive your consumer proposal. You can try renegotiating with your creditors, but it can be risky. Once your proposal is annulled, you lose protection against your creditors.

If you can’t reinstate your consumer proposal, you may need to file for bankruptcy to regain protection against your creditors and settle your debts.

How To Avoid an Annulment

Here are three tips for preventing a consumer proposal annulment:

  1. Negotiate an affordable monthly payment. Ensure your monthly payment is less than your previous monthly bill load. Consider a longer repayment period. A proposal can have a maximum payout period of five years.

  2. Schedule your payments to coincide with payday. This will help to avoid bouncing any cheques and missing payments.

  3. Make extra payments. It’s wise to make additional payments whenever you have the funds and if the terms of your consumer proposal allow for this. For example, if you receive a tax refund or a bonus at work, use a portion of the funds to make an extra payment on your consumer proposal.

If your financial situation changes and you can no longer make your payments, talk to your LIT or Administrator as soon as possible.

Consumer Proposal Annulment Help in Ottawa

If you need help getting your consumer proposal reinstated, the licensed insolvency trustees at D. & A. MacLeod Company Ltd. can help. Our team will take the time to listen to your needs, analyze your financial situation and get to the root of your debt troubles. We now offer virtual appointments for consumer proposals for clients across Canada.

Contact us today to learn more!


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