COVID19 Order Provides Payment Extension For Consumer Proposals

A court order was issued by the Ontario Superior Court of Justice on Monday, April 27, 2020, based on a motion filed by the Attorney General of Canada on behalf of the Superintendent of Bankruptcy. This order provides Ontarians who have filed for insolvency with greater flexibility to meet their obligations during this time of economic uncertainty by offering a payment extension. This includes allowing consumer proposal debtors to miss an additional three consumer proposal payments between March 13, 2020, and December 31, 2020, before the Administrator declares the consumer proposal to be in default, as well as extensions of certain operational deadlines. For those outside of Ontario, applications for similar relief are being scheduled to be heard in other provinces and territories on or before April 30, 2020.

Of particular significance, the order provides that “an Active Consumer Proposal shall not be deemed annulled pursuant to section 66.31 of the [Bankruptcy and Insolvency Act] unless the consumer debtor is in default of, in the case when payments under the Active Consumer Proposal are to be made monthly or more frequently, the day on which the consumer debtor is in default for an amount that is equal to or more than the amount of three payments plus an additional amount equivalent to up to three payments for defaults that occurred during the period of March 13, 2020, to December 31, 2020“. This provides individuals in a consumer proposal an additional three months extension should difficult times limit their ability to make payments in a consumer proposal.

We encourage those in consumer proposals to continue making payments if they are working and able to make those payments. Doing so will still provide a certificate of full performance sooner, improve credit faster, and may reserve these this provision should an unexpected circumstance occur in the future to limit payments.

Full copies of the Ontario Orders are provided below:

• The Order dated April 27 2020 providing an extension of time for making consumer proposal payments or division I proposal payments.
• The Endorsement dated April 27 2020 accompanying the Order.