Statute of Limitations in BC and Consumer Proposal
The following question was asked via CECraig.com:
Subject: Statute of Limitations BC and Consumer Proposal
Question: FROM “Concerned CP”
Hello Ms. Trustee
Does the submission of a consumer debt proposal restart the statute of limitations in BC? If so, does it still remain if the debt proposal was unaccepted and withdrawn?
The last payment to RBC prior to the Consumer Debt Proposal was in 2011 and other than the Consumer Proposal, no payments have been made direct.
What are my options? Is the last payment direct made in 2011 still in effect as far as statute of limitations or is it now changed to 2013 when I retracted my Consumer Propsal?
Dear Concerned CP;
The question that you have regarding the interaction between the Statute of Limitations and consumer proposal can be answered with respect to the Statute of Limitations Act in British Columbia. As you may be aware, the Statute of Limitations in BC changed as of June 2013 and it now indicates that creditors have two years in which to collect their debt. If your debt occurred before that date, which it did, then your creditors would have collection rights under the old Act which would allow them 6 years to collect their debt.
Once you have filed a consumer proposal you come under the Bankruptcy and Insolvency Act which is a federal Act. By Section 62(1.1) of the Bankruptcy and Insolvency Act, when an insolvent person makes a proposal the time for determining the claims of creditors is the time of filing the Notice of Intention, or the Proposal if no notice of intention was filed. Therefore, the RBC will be party to your proposal as filed. Further the creditor’s ability to take proceedings against the debtor is stayed by the Bankruptcy and Insolvency Act, and the Stay of Proceedings suspends the operations of the Statute of Limitations. The suspension will end when and if the Trustee is discharged and the statute of limitations commences to run again, at that time.
So, in your case, you would have to look at the timing of the debt. You “reactivated” your debt when you were making payments under the Consumer Proposal and if we consider the Trustee discharged in 2011, then your creditors would have 6 years to collect from you.
Further, once you have defaulted under your Consumer Proposal, that is, if you have an agreed upon repayment plan, then by virtue of 66.32 of the Act, unless a court otherwise orders, the consumer debtor may not make another consumer proposal until all claims of your creditors who were part of your proposal are paid in full.
There is a “saving” provision under the Act that allows an administrator under the Proposal, i.e. your Trustee, to apply to court o t revive your consumer proposal. Under Section 66.31 (9), the administrator under a Proposal may at any time apply to court for an order reviving any consumer proposal of a consumer debtor. However, this may be a bit of a reach for the court to approve given the length of time that has elapsed since your default.
You always have the option of trying to settle directly with your creditors or indeed, assigning yourself into bankruptcy if you are not able to come to an agreed arrangements.
Hopefully this helps
Colleen Craig, CA, CIRP
C.E. Craig & Associates Inc.
204-2736 Quadra Street
Solving Your Debt Puzzle