Here’s the bad news: if your consumer proposal is annulled, you’ve lost any protection from your creditors. Their rights are re-instated and they can pursue you for your debts again.
Here’s the good news: other than doing nothing, you have five options to still get relief from your debts and a fresh start.
Don’t Panic. You Still Have Options.
1. Revive the Proposal – If you can meet with your trustee within 30 days of the proposal annulment and convince the trustee that you have the ability to bring your proposal back into good standing. The trustee will determine if it’s reasonable to assume that you’ll be able to complete the remaining proposal terms, if the creditors agree to the revival of the proposal.
If your trustee agrees to allow you to attempt to revive the proposal, your creditors are notified that the proposal will automatically be revived unless they raise an objection with 60 days. If they don’t object, you continue on with the original terms.
2. Ask the Court to Revive the Proposal – If you can’t submit an application to have the proposal automatically revived within 30 days of the proposal annulment, or the trustee does not believe that such an application is reasonable, then you could make an application to the court to ask the court to authorize the revival of the proposal. This is likely going to be more cumbersome, costly and likely won’t happen very quickly.
3. File Bankruptcy – If your proposal was annulled because your circumstances changed for the worse since the filing of the proposal, it might now be more prudent to think about filing a personal bankruptcy. A bankruptcy would re-instate the creditor protection that you lost when your proposal was annulled. Meet with your trustee to discuss the cost and duties of filing bankruptcy for your personal situation. That way you can make an informed decision as to whether bankruptcy is right for you.
4. File a Debt Management Plan – If you cannot revive the proposal and want to avoid a bankruptcy, you could contact a local not for profit credit counselling agency that might be able to help you with the filing of a plan to repay your debts in full, if your situation improves.
5. Negotiate with your Creditors – After receiving notice of the annulled proposal, some, or all of your creditors will eventually start contacting you again for repayment. If you have the ability to do so, you could try making your own informal offers with your creditors to settle the debts on your own. Opportunities such as selling your assets to raise funds for debt repayment could be one way to eliminate a debt once and for all.
Unless your financial situation has improved since the annulment of the proposal, for many the most logical option would be to attempt to revive the proposal or file a bankruptcy, if protection from creditors is still needed. Either way, be sure to discuss the circumstances surrounding the annulment with your trustee, along with reviewing your financial future; that way the trustee can help you to evaluate which option might be best for you.