What Is A Voluntary Deposit

Voluntary deposit is a judicial process used in Québec to restructure a debt repayment. It is legislated in the Québec Code of Civil Procedure. Here’s how it works:

Process:

• The debtor must go to the courthouse and meet with the court clerk who will prepare a list of debts as well as an income statement.
• The clerk will calculate the required payment.
• The clerk will also notify the creditors, receive payments and make distribution to the creditors.
• The payment must be made per a strict payment schedule. Any default of more than 30 days will terminate the voluntary deposit.

Protection:

• Voluntary deposit will offer protection against new wage garnishment and asset seizure.
• If a garnishment is already active, it will not be stopped, the garnishment amount will simply be deducted from the required payment.

End of voluntary deposit: The program will end in one of these circumstances:

• The debtor explicitly request the end of the voluntary deposit (must sign the required form).
• The debtor defaults on the arrangement by more than 30 days.
• The debtor has paid all the debts listed.

Voluntary deposit must now be weighed against other solutions to debt. Maybe a bankruptcy or a Proposal can be a better option.

Here are a few options (for a person that has never been bankrupt and that completes the chosen process as it should):

* In all cases, debt for child support or alimony can always lead to garnishment.

The chart above shows that it is important to take the time to analyse different options. A bankruptcy may be shorter, but will have different consequences than a proposal or a voluntary deposit.

With all this information, it may be best to seek professional advice from a Licenced Insolvency Trustee in order to proceed with a complete analysis and to get a clear recommendation based on the details of your needs and personal situation.