Consider voluntary deposit to pay off your debts

Similar to a consolidation order, voluntary deposit implies taking a regular amount of your income to repay your debts. Here’s what you need to know.

Similar to a consolidation order in other provinces, voluntary deposit is only available in Quebec and implies taking a monthly or bi-weekly amount of your income to repay your debts.

When you start a voluntary deposit, the interest rate on your debts will be reduced to five per cent. Voluntary deposit will stop wage garnishments and any debt collection calls from your various creditors.

Voluntary deposit is a possible debt management solution that can help you avoid bankruptcy. It can protect your assets, but it is important to note that in the case of non-payment, not all your assets will be protected, only those essential to your dependents.

You’ll be able to register at your local courthouse. Registering implies making a written statement under oath declaring your personal information as well as the details of your financial situation, including debt, income and dependents. Making a statement under oath is a legally binding act. You will need to declare that all your personal and financial details are accurate. Lying under oath is a serious offense.

Your payment scheme will be based on your income, your dependents and the amounts owed to various creditors. Your income can consist of your salary, income from being self-employed, employment insurance money or social assistance funds.

Once your statement of oath is completed, your creditors will be notified of the amount owed to them. They will then have 30 days to inform the court of any discrepancy between the numbers provided by you and the amount they believe is owed to them.

Your court clerk will make payments on your behalf until every single one of your debts is paid off. Each time one of your debts is paid in its entirety, you will receive a letter by registered mail informing you.

Closing your file can only be done by either paying off the debt entirely through the court, paying off each individual creditor directly in return for a discharge to be presented to the court, or by withdrawing the initial application and giving up all benefits related to the voluntary deposit system.

• Voluntary deposit is a measure only available in Quebec, and you will no longer be protected against seizure if you move outside of the province.
• Deposits cannot be suspended and they can only be reduced if your income changes. In that case, a new declaration needs to be made to replace the existing one.

A debtor’s file is public for the whole duration of the voluntary deposit process. Anybody can request to see if payments are being made on time.