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; or
  • 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.

Related topics

• Canada Business Network
• Related provincial and territorial government sites
• Industry Canada
• Consumer Information

Date modified:

2017-04-28