Gouvernement du Québec - Justice

Voluntary deposit

Voluntary depositWhen bills pile up and there is no money to pay them, creditors lose patience. You must find a way to avoid bankruptcy and seizure.

One way to resolve your financial difficulties is to register for voluntary deposit.

Voluntary deposit: a protection measure
Registering for voluntary deposit
Amount deposited
Calculating exemptions
When are deposits made?
Can deposits be suspended or reduced?
What happens if you do not fulfill your commitments?
Debtor-creditor relations
The debtor's file
If you receive a notice of execution
For more information


Voluntary deposit: a protection measure

Voluntary deposit is a free measure provided for in the Code of Civil Procedure. It allows you to pay off your debts by voluntarily depositing a percentage of your income at the office of the Court of Québec. The office then distributes the money proportionately to all your creditors, based on the amount owed to each creditor. By making voluntary deposits, you can avoid having to declare bankruptcy, and you cannot be sued by your creditors. You are also protected from the seizure of certain property (e.g. your work income).

In addition, by signing up for voluntary deposit, you pay only the agreed rate of interest or the legal rate of 5%, whichever is lower, regardless of the creditor involved.

However, voluntary deposit does not protect you from the seizure of your immovable property, your motor vehicle, or any furniture in your family residence on which you still owe money to the vendor. Last, since voluntary deposit exists only in Québec, you will not be protected from seizure if you move to another province.



Registering for voluntary deposit

To register for voluntary deposit, you must file a declaration at the office of the Court of Québec (Civil Division) in your nearest courthouse.

In your declaration, you must indicate

  • your full name;
  • your contact information;
  • the name and address of your employer or workplace;
  • your income;
  • the number of your dependents;
  • a list of all your creditors;
  • the nature and amount of all your debts, along with supporting documents;
  • the amount you commit to paying to the court office for distribution to your creditors.

You must inform the court office, within 10 days, if any of the information in your declaration needs to be changed.  You must also update your information every year.

A creditor or any interested party may contest your declaration at the court where it was filed, within 15 days of becoming aware of it. You will be informed of any contestation.

 

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Amount deposited

The amount deposited cannot be less than the part of your income that could otherwise be seized to pay your debts. To calculate this amount, you must add up all your income, including income received as cash, in kind or as services. However, certain amounts are excluded from this calculation, such as

  • property (or support) declared by the donor or testator to be exempt from seizure;
  • judicially awarded support, if intended to provide for a minor child.
Once you have established your income, you must subtract the amount of the exemption provided for by law, taking into account, in particular, the number of your dependents.



Calculating exemptions (April 1, 2016 to March31, 2017)

Number of dependents

Weekly

Every two weeks

Twice a month

Montly

None

$273.17 $546.35 $591.88

$1183.75

1

$382.44 $764.89 $828.63

$1657.25

2

$437.07 $874.15 $946.99

$1893.98

3

$491.70 $983.41 $1065.36

$2130.71

4

$546.33 $1092.67 $1183.72

$2367.44

5

$600.96 $1201.93 $1302.09

$2604.17

6

$655.59 $1311.19 $1420.45

$2840.90

7

$710.22 $1420.45 $1538.82

$3077.63

8

$764.85 $1529.71 $1657.18

$3314.36

9

$819.48 $1638.97 $1775.55

$3551.09

10

$874.11 $1748.23 $1893.91

$3787.82

11

$928.74 $1857.49 $2012.28

$4024.55

12

$983.37 $1966.75 $2130.64

$4261.28

The seizable portion of your income is 30% of the remainder. However, the percentage is 50% if one of your debts is for a support payment.

 

When are deposits made?

You must make your deposits at the office of the Court of Québec as provided for in your declaration, either in person or by mail. Before mailing a deposit, make sure your name and file number appear on the postal money order, bank draft or certified cheque, which must be made out to the Minister of Finance.



Can deposits be suspended or reduced?

You cannot delay or suspend a deposit of the seizable portion of your income, or reduce the amount of the deposit. If your income or conditions of employment change, you must inform the court office immediately.

If you fail to make regular deposits, you will lose the protection of the voluntary deposit system. Your income or furniture could then be seized if you do not remedy the situation within 30 days after receiving a notice from the court clerk. However, you may still be protected if you can give the court office a serious reason for your failure to make payments.

What happens if you do not fulfill your commitments?

If you do not fulfill your commitments, you may lose the protection against seizure and legal action offered by the voluntary deposit measure. The clerk will send you a notice of default if:

  • you do not make the deposits you undertook to make (e.g. on a monthly basis);
  • you do not notify the clerk of a change in your situation (e.g. a new job, moving house, number of dependents);
  • you do not update your information every year.

The notice from the clerk will give you 30 days to remedy the situation. If you do not do so, you will no longer be protected against seizure or legal proceedings. The clerk will immediately inform your creditors, and will then close your file.


Debtor-creditor relations

The amounts deposited will be divided among the creditors on the list given to the court office. As soon as you file your declaration, the clerk

  • notifies each creditor on the list;
  • asks the creditors
    • to participate in the distribution,
    • to file their claim at the court office, and
    • to make representations.

These steps are completed free of charge. The clerk must repeat the process for any creditors that are declared later.

In the notification, each creditor is informed of the amount that you declare you owe to that creditor.

If your declaration contains an error, the creditor must correct it by filing a claim setting out the reason for, date and amount of the debt, within 30 days after receiving the notification. The creditor must also provide supporting documents for the claim. A creditor who misses the deadline for filing a claim or fails to submit supporting documents is entitled only to the amount you stated in your declaration. No adjustment can be made until the creditor has filed the necessary documents.
The money is distributed to the creditors at least every three months, except for support creditors who are paid at least once a month.

Each creditor receives a share proportional to the amount of the claim and the total amount of the deposits. If all debts total $1,000 for instance, a creditor to whom the debtor owes $100 will receive 10% of the deposits. In other words, the amounts are apportioned pro rata to the size of each claim except if one of the creditors is owed support, in which case the distribution will be made on a different basis.



The debtor's file

A debtor's file is public. Anyone who wants to verify that deposits are being made regularly may consult the file on request to the clerk of the Service des dépôts volontaires.

Debtors can close their file

  • by making deposits until all debts registered with the Service des dépôts volontaires have been paid;
  • by paying creditors directly and asking each of them to provide a discharge which the debtor then forwards to the Service des dépôts volontaires; or
  • by forgoing the benefits of the voluntary deposit system and withdrawing the initial application.

If you decide to stop making deposits and pay your debts according to an arrangement worked out with each of your creditors, you will no longer be protected against seizure.

Assistance is provided by the Service des dépôts volontaires free of charge. If no deposits or new declarations are made within a twelve-month period, the clerk will send a notice giving you 30 days to state whether or not you intend to continue using the voluntary deposit system. The clerk will immediately close your file and inform your creditors if you do not reply to the notice within the required time, and you will no longer be protected by the system.

   

If you receive a notice of execution

If your property is seized while you are registered with the voluntary deposit service, contact the person who sent you the notice of execution immediately so that the appropriate steps can be taken.

   

For more information

The different types of seizures:
     • Seizure
The addresses and telephone numbers of Québec courthouses:
     • Courthouses
The judicial district a municipality is located in:
     • Search for a judicial district
Laws relating to voluntary deposit:
     • Code of Civil Procedure Clicking on this icon will take you to another website. (arts. 664 to 670)
     • Act to facilitate the payment of support Clicking on this icon will take you to another website.
Forms that relate to voluntary deposit:
     • List of Creditors (SJ-226A)
     • Voluntary Deposit (SJ-224A)
     • Garnishment (Garnishment of wages) (SJ-255A)

The content of this document is strictly informative and has no legal value.

If you find some of the information difficult to understand, do not hesitate to contact us. Please note, however, that we cannot interpret the information to apply it to a specific situation.

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Latest update: April 1, 2016



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