Division I Proposals

Division I Proposals

About Division I Proposals

Small and medium sized businesses have tons at stake- personal guarantees, the livelihood of their employees and stakeholders, director’s liabilities, and more. Businesses often feel that they are at the mercy of their creditors or the bank. Division I Proposals provide an opportunity to overcome past business shortcomings and focus on the future- free from the burden of your business debts.

Sole proprietors and self-employed individuals should read about a consumer proposal or personal division I proposals which may be a better fit.

What is a Division I Proposal

A division I Proposal, also called a commercial proposal, lets a corporation or individual put forward a plan to creditors to pay a portion of your unsecured debt, over time.

Key considerations about division I Proposals

• Upon filing a proposal, all creditors are stayed (stopped) from continuing any enforcement for collection of their past debt.
• If you’re not ready to put forward a plan but creditor’s are starting enforcement, a Notice of Intention to Make a Proposal can be filed, providing at least 30 days of calm to develop a plan.
• A majority in number and two thirds in dollar value approving your proposal is required to effect your division I proposal.
• If a division I proposal is not accepted by creditors, the corporation is automatically bankrupt.
• Filing a proposal can be used to stop a receivership, an application for a bankruptcy order, demands from your bank, lawsuits, or CRA garnishments and liens.
• A division I proposal can include provisions to release directors and guarantors from liability, terminate contracts and leases, and sell your business.

Get a Free Consultation

There is no cost to meet with a licensed insolvency trustee to review your business situation and see if a division I proposal is right for you. Explore your options and understand your personal obligations by calling Krieger & Company today.