Consumer Proposal Victoria - PDSC Trustee Site
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What Happens if You Default on Your Consumer Proposal?
Once your consumer proposal has been approved it is your responsibility to stick to the payment schedule. Your bankruptcy trustee will provide two mandatory credit counselling session designed to address your money management skills and provide you with tools for better financial health in the future, however they are not responsible for keeping your proposal payments on track.
You can miss two proposal payments without dire consequences; the term will simply be extended to include those two payments. However if you miss a third payment your consumer proposal is automatically annulled and you are back to where you started. At this point you can file an amended proposal with a more manageable payment or you can assign into bankruptcy. However a proposal with a lower payment is unlikely to be accepted if your circumstances have not changed.
It is important to look at the reasons that you are struggling to make your payments; if your financial circumstances have drastically changed, then perhaps bankruptcy is the best option, but if you are simply getting back into bad habits of overspending you may want to focus more on money management and budgeting and try and stay on track with your original proposal schedule.
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