recovering from financial debt

When corporations, limited partnerships, or independent businesses become encumbered by debt to the point where creditors are threatening legal action, a Division 1 proposal is a great solution to negotiate affordable repayments while keeping your business afloat.

If your business is in financial trouble and you need a steady hand to get you on the road to recovery, Charles Advisory Services is ready to help.

How a Division 1 Proposal Works

A Division 1 proposal is a formal legal proceeding that is governed by the Bankruptcy and Insolvency Act of Canada. Its purpose is to help businesses, as well as individuals with unsecured debts exceeding $250,000, negotiate affordable repayment of their debts to avoid filing for bankruptcy.

As a licensed insolvency trustee, Robert Charles and his team can file a Division 1 proposal on your behalf, letting you get back to building your business.

Our first step is to meet with you and have an in-depth look at your financial situation. Together we’ll work out an affordable repayment solution that will have the best chance of approval by your creditors, while allowing your business to still operate.

Once we file the Division 1 proposal, or a Notice of Intent to Make a Proposal, you can stop making payments to unsecured creditors. Unwanted contact from these creditors will cease, as will any legal action against you on their behalf.

Division 1 proposals are subject to approval by your creditors at a creditor meeting. We will present the proposal for you, ensuring they understand your intent to repay and how much each creditor can expect, as well as when. To be approved, at least 66.6% in dollars and 50% plus one in number of eligible creditors must vote in favour of your proposal.

If the proposal if rejected, however, the business is immediately placed into bankruptcy. Although this prospect might be frightening, it actually improves the chances of your proposal being approved. When we prepare your proposal, we will make it clear to your creditors how much they will receive under the Division 1 proposal vs. bankruptcy. In most cases, creditors will receive a bigger repayment under a proposal, providing incentive for them to vote in your favour.

We want your business to succeed, and will be with you every step of the way in developing a Division 1 proposal that will have the best chance of success.

When Your Division 1 Proposal is Approved

If your Division 1 proposal is accepted by the creditors, and is subsequently approved by the Court, it becomes legally binding to your unsecured creditors and you may begin repayments under the terms of the proposal. Once you’ve completed those terms, you are legally absolved of the applicable debts.

It’s important to be diligent in fulfilling your repayment obligations under the proposal, be they in one lump sum or over several years, as missing even one payment can result in your business being declared bankrupt. We can offer recommendations that will help you stay on track, so you can build a successful business and avoid debt management problems in the future.

Division 1 Proposal Services in Toronto

Let’s take care of your business’ debt situation before it hurts your overall business goals. Our team will work hard to develop the most affordable Division 1 proposal repayment plan that, once approved, will clear you of debt as soon as possible while you get back to growing your business.

Since 2006, Charles Advisory Services has provided Division 1, corporate debt restructuring, and corporate insolvency services to businesses in Toronto. Founder and Licensed Insolvency Trustee Robert Charles has helped hundreds of individuals, families, and businesses manage their debt situation with the personal service that only an independent licensed insolvency trustee can give. With Charles Advisory Services, trusted corporate debt solutions are just a phone call away.

If your business is in financial trouble and would like to see what a Division 1 proposal can do for you, contact Charles Advisory Services today for a free consultation!