Dividends to Creditors

When do payments to my creditors begin?

The first dividend payment to your creditors begins after the administrative fees are paid. This can take between 1-1.5 years after the proposal is filed. Dividends are only disbursed to your proven creditors.

What is a proven creditor?

A proven creditor is a creditor who has proved to us the amount owed to them at the time you filed your proposal. The creditor must submit what is called a “proof of claim” in order to receive dividend payments from your proposal.

How long do my creditors have to submit a proof of claim?

Your creditors have the entire length of your active proposal to submit a proof of claim.

How often do my creditors get paid?

Your creditors will receive dividends approximately every 6 months after the first dividend disbursement, as long as your payments are kept current, until your proposal is completed.

What happens if a creditor does not submit a proof of claim and I have completed my proposal?

Provided that the debt for the creditor in question is an unsecured debt and does not fall under those debts not dischargeable under the Bankruptcy and Insolvency Act, it is still included in your proposal and you will not be responsible for it. Please refer to the sheet given to you at sign-up named “Debts not Discharged” should you have a question in regard to which debts are not dischargeable.

What is the Statement of Receipts and Disbursements (Form 14)?

The Statement of Receipts and Disbursements (Form 14) is a report reflecting the receipts received to date in the proposal as well as how the funds have been disbursed to date.

What is the dividend sheet showing?

The dividend sheet shows the total funds disbursed to your creditors (total payment) and to the Government (total levy). It also shows the current fund disbursed to your creditors (current payment) and to the Government (current levy).

I owe money to Canada Revenue Agency (CRA); is it included in my proposal?

If you owe income tax for the year you filed your proposal, you are responsible for paying this debt unless CRA agrees at their discretion, to include your pre-proposal tax liability in your proposal.

Is CRA allowed to keep my tax refund?

If, when you filed your proposal, you had a debt to CRA for a prior year and then became eligible for a refund for the current year, CRA may apply your current year’s refund against any balance owing from prior years.