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What is voluntary deposit?

Voluntary deposit is a measure provided for by the Quebec Civil Code designed to protect you against wage garnishment and the seizure of certain property. This solution allows you to pay your debts through the Court at regular intervals. The Court then divides your payment among your creditors. Payments must be made until you have paid back 100% of your debts.

How does voluntary deposit work?

Allows you to pay back your debt through the Court.
Voluntary depositing lasts until you have paid back 100% of your debts.
A percentage of your income is paid to the Court at regular intervals.

Understand voluntary deposits better

By opting for voluntary deposits, you commit to reimbursing your creditors by paying a percentage of your salary until your debts are paid back. The voluntary deposit amount is set by law and may surpass your budget.

The seizable part of your salary corresponds to 30% of your gross income after deduction of amounts provided for dependents. However, this percentage can increase to 50% of gross income if alimony is part of the voluntary deposit.

It is recommended you meet with a professional to learn if a voluntary deposit is the solution to your debt.

Benefits of voluntary deposits.

Protects against wage garnishment and seizure of certain assets.

The interest rate corresponds to the legal rate, i.e., 5%.

Prevents bankruptcy.
Disadvantages of voluntary deposit

A voluntary deposit has some limitations:

  • Does not protect against the seizure of immovable property, vehicles, or unpaid moveable property
  • Does not reduce the total amount of debt
  • The amount of a voluntary deposit is set by law and may not suit your budget
  • This proceeding can only be applied in Quebec
  • It affects your credit score to the same extent as bankruptcy

Is a voluntary deposit the right solution for you?

Consider a voluntary deposit as a solution if:

  1. The interest rate of all your debts is very high.
  2. A financial institution has refused to grant you a consolidation loan.
  3. You reside in Quebec and do not plan to move out of the province.

Note that the voluntary deposit may affect your credit file in the same way as a bankruptcy.

This debt solution doesn’t protect you against the seizure of real estate and some other personal property. For more information about the voluntary deposit and the process, please contact an insolvency professional at Ginsberg Gingras.

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