Division 1 Proposals in Canada
Is your business struggling to pay back its debts? A Division 1 Proposal could be the lifeline it needs. Call us today to get your company back on track.
Safe, secure & confidential
Safe, secure & confidential
Getting your business back on track with a Division 1 Proposal
Running a business can be hard and the weight of debt can be overwhelming, especially if you’re balancing that with paying employees and keeping clients happy. If you’re struggling to keep on top of your finances, it’s important to remember you’re not alone.
With Harris & Partners at your side, you can find your way to financial security. One way to do this is through a Division 1 Proposal and corporate financial restructuring.
Got questions? No problem. Our team is on hand with the answers you need.
Debt relief for businesses - it's a simple process
We’ll sit down with you for a friendly chat to really understand what you’re going through. Don’t worry, it’s a safe place to talk freely and we won’t judge. We’ll ask about your money, your debts, and who you owe – just so we can help you better. And remember, talking to us is free and private.
After we get the full picture of your situation, we’ll start making a plan that’s just for you. We’ll look at all the ways you can deal with your debt, but we’ll only choose what makes you feel comfortable. We won’t push you into anything. Everything we do is about what works best for you.
When you’re happy with the plan, we’ll get it going. We’re here to make sure you’re okay financially, and we’ll be with you the whole time, giving help and advice. We care about making things easier and less stressful for you.
Example Savings: Division 1 Proposals
Your Potential Debts:
Customer monthly repayments before and after filing division 1 proposal
Before Help
$386,732.63
After Help (payable over 60 months)
$1930
Monthly payments are determined based on individual financial factors
How Much Could I Save?How does a Division 1 Proposal work?
Finding your way through financial challenges can be daunting, but a Division 1 Proposal offers a structured and legal option for overcoming and managing these hurdles. This process involves several key steps:
Step 1. Chat with a Licensed Insolvency Trustee (LIT)
Think of a LIT as your guide through this process. They will outline your options and develop a strategy to figure out your financial struggles.
Step 2. Filing a proposal or Notice of Intention (NOI)
Your LIT will file either a proposal or an NOI (notice of intention to file a proposal, to stop all actions by creditors) with the Office of the Superintendent of Bankruptcy (OSB) on your behalf.
This step offers immediate relief; it stops direct payments to unsecured creditors, halts garnishments, and pauses any lawsuits from creditors. A copy of the NOI is then sent to your creditors within five days.
Step 3. The creditors vote
Your creditors will be given a comparative analysis of potential returns in the event of a bankruptcy, versus the offer in your Division 1 Proposal. To get approval, you will need a majority vote and the acceptance votes will have to represent more than 2 thirds of the debt you owe.
Step 4. Outcome
If the proposal is accepted by both the creditors and the Court, you have to stick to its terms, which allows you to retain your assets while repaying your debts. If rejected, bankruptcy is declared automatically.
Step 5. Debt removed
If you stick to all of the proposal’s conditions, all of your debts will be removed and you will leave the process debt-free.
Is a Division 1 Proposal right for my business?
Choosing the right debt relief service can be tricky – you want to make sure it’s the right one for your specific situation and business.
Division 1 Proposals come with a range of advantages, such as:
- You can keep all of your assets
- You will be protected from creditors making collections
- It’s a viable way to avoid bankruptcy
- Your unsecured debts will be reduced
- Sometimes, even tax debts can be paid off at a lower amount
- Only your business is affected, you are protected personally
It is important to remember that each debt solution comes with its own disadvantages. The main risk of Division 1 Proposals is that, if your proposal isn’t approved, you will automatically go into bankruptcy.
We know that this is a big decision, but you don’t have to face it alone. Our Licensed Insolvency Trustees can walk you through your options, answer your questions and help you find the best debt solution for you.
Why choose us for consumer proposals in Ontario?
Our Licensed Insolvency Trustees can provide a customised consumer proposal that could shrink your debt by up to 80%.
Our multilingual team offers debt support in Farsi, Portuguese, Italian, Tamil, and more, so you can feel comfortable every step of the way.
With offices in nine provinces, we offer in-person debt support across Canada—from Atlantic provinces to Ontario to British Columbia.
Our Licensed Insolvency Trustees - here to help with Division 1 Proposals
With our Licensed Insolvency Trustees, you will never have to face the stress of business debt alone again. We are backed by years of experience and are ready to help you find a way to financial security.
-
![Jay harris]( "Jay-150×150-1.png")
Jay T. HarrisFCPA, CIRP, LITLicensed Insolvency Trustee -
![kyle]( "Kyle-150×150-1")
Kyle HarrisLL.B., CIRP, LITLicensed Insolvency Trustee -
![adam]( "Adam-150×150-1 (1)")
Adam FisherCPA, CIRP, LITLicensed Insolvency Trustee -
![Joshua Harris]( "josh-NEW")
Joshua HarrisBCOMM., MIB, CIRP, LITLicensed Insolvency Trustee -
![advisor]( "circle-cropped-150×150-1")
David AdamsLicensed Insolvency Trustee -
![doug]( "doug-1.jpg (1)")
Doug LoiselleLicensed Insolvency Trustee -
![Rob McLernon]( "zz")
Robert McLernonBComm, CIRP, LITLicensed Insolvency Trustee -
![shelley]( "1050_Shelley_Koehli.jpg")
Shelley KoehliLicensed Insolvency Trustee -
![big-Picture]( "big-Picture1 (1)")
Jill StruebyLicensed Insolvency Trustee
Division 1 Proposal FAQs
Why file for division 1 proposal?
A Division 1 proposal is a formal debt restructuring process under the Bankruptcy and Insolvency Act in Canada. It is an alternative to bankruptcy for individuals with $250,000 of debt excluding the mortgage of your primary residence and businesses with any amount of debt.
Here are some of the reasons why you might file for a Division 1 proposal:
- To avoid bankruptcy and its negative consequences
- To get relief from creditor harassment
- To stop wage garnishment
- To consolidate your debts into one affordable monthly payment
- To reduce or eliminate interest charges
- To keep your assets
- To rebuild your credit
What is a Division 1 proposal?
A Division 1 proposal is an offer made to your creditors to change the terms of your debts. The proposal may involve reducing the amount you owe, extending the repayment period, or both. Your creditors will vote on whether or not to accept the proposal. If a majority of your creditors agree to the proposal, it becomes legally binding.
What is the Difference Between a Division 1 Proposal and Bankruptcy?
The difference between a Division 1 Proposal and Bankruptcy lies primarily in their structure, impact on assets, and long-term effects on an individual’s or a company’s financial standing. In a Division 1 Proposal, the terms of your debt are changed. This could include reducing the amount you owe, increasing the repayment period, or both. Whereas in a bankruptcy, you hand over your assets to pay off as much of the debt as possible, and any remaining debts are written off.
Finding your way to financial freedom with Harris & Partners
If you’re considering a Division 1 Proposal or corporate financial restructuring as an option for your business, give our teams a call today.
Our Licensed Insolvency Trustees are here to help you find the best debt solution for you. No matter how much debt you have, or who you owe money to, you can count on our years of expertise to get you through. There’s no need to struggle alone – take the first step to financial control today and get in touch.
It's never too late to obtain debt help. Book your free consultation today
- Phone number
- 800-268-8093
- hello@harrispartners.ca
Contact form
Helping Canadian businesses file Division 1 proposals
We operate across all provinces in Canada except Quebec, so help is always available at a Harris & Partners office near you.
