What Is A Voluntary Deposit

2017-08-02   minute read


Consumer Proposal

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:




  • 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.


  • 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):

Solution: Maximum time Creditors can sue or seize or garnish? Interest rate Payment calculation Negative effect on credit
Pay your debt No limit, it has to be paid in full Yes As per contract with the creditor As per contract with the creditor No, if paid properly
Voluntary deposit No limit, it has to be paid in full No* 5% As per a formula in the law Yes, for three years after it is finished
Consumer proposal 60 months No* n/a As per the budget (analysis with the LIT) Yes, for three years after it is finished
Bankruptcy Normally 9 or 21 months No* n/a As per a formula in the law Yes, for 6 years after it is finished

* 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.


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