David H. Brown

The trustee brought a motion seeking court approval to amend a previously approved consumer proposal under Division I of the Bankruptcy and Insolvency Act to extend the debtor’s payment deadline by two years.

The court considered whether it had jurisdiction to amend a court‑approved proposal and the circumstances in which such a motion is required.

The court held that it has jurisdiction to amend a proposal on motion with notice to creditors and the Office of the Superintendent of Bankruptcy, but that such a motion is necessary only where a material change affecting the substance of the proposal is sought.

Changes merely affecting the timing of payments that do not alter the total return to creditors are not material changes.

The motion to approve the amendment extending the payment period was granted.

A trustee brought a motion seeking court approval to amend an existing court‑approved consumer proposal under Division I of the Bankruptcy and Insolvency Act.

The proposed amendment would include approximately $33,000 in post‑proposal tax liabilities in exchange for an additional $1,500 payment, thereby reducing the return to original creditors.

The court found the amendment constituted a material change and that the record did not demonstrate creditors were adequately informed of the nature and effect of the proposed amendment.

The court held that creditors must be properly notified and given an informed opportunity to assess the revised proposal.

The motion was dismissed without prejudice to bring a new motion on proper notice to creditors and the Office of the Superintendent of Bankruptcy.