b'The Consumer Proposal Taking stock more than 25 years later By Martin Poirier, CPA, CA, CIRP, LIT, Lemieux Nolet inc.T he consumer proposal was introduced in the early 1990s. Ituntil the Bankruptcy and Insolvency Act reform of September 18, was part of the major amendments to the Bankruptcy and2009, that insolvency professionals became far more eager to Insolvency Act adopted on November 30, 1992. This proce- use it. This was because the legislative changes raised the eligible dure gave individuals a new tool for dealing with insolvency:debt threshold to $250,000 for individuals and also allowed the option of making a proposal to creditors via a simplifiedan indebted couple to submit a joint proposal, thereby raising formula for settling their debt problems without running thetheir maximum eligible indebtedness to $500,000 (excluding risk of losing their residence or certain other assets. Before thisthe mortgage on their principal residence). By the end of 2009, procedure, the only option available to individuals was a morestatistics showed that the proportion of consumer proposals had restrictive and costly form of proposal that required a vote by theincreased to 25 per cent of all personal insolvency files. Today, creditors with the possibility of being rejected. according to the Office of the Superintendent of Bankruptcy, At the time, the consumer proposal was limited to a maximummore than half of personal insolvency filings areindebtedness of $75,000, excluding the mortgage on the debtorsconsumer proposals.principal residence and subject to acceptance by a simpleIs this a passing fad or does it reflect a genuine wish on the part majority, by dollar value of claims (money vote), of of consumer debtors to come to arrangements withunsecured creditors. their creditors? The consumer proposal started out modestly, being used inThe consumer proposal clearly owes its popularity to several under 15 per cent of all consumer insolvency files. It was notfactors: better mastery of the procedure by insolvency 42 Rebuilding SuccessFall/Winter 2019'