How do voluntary deposits work?
With the voluntary deposit procedure, you make a monthly payment determined by your salary and family responsibilities to the court, and pay back the full amount, including interest on capital. This program is normally administered by the court in your locality.
When are voluntary deposits a good debt solution?
Voluntary deposits are a means for debtors who reside in Quebec to make monthly payments to the court based on their income and dependents. The court then ensures that these payments are distributed to creditors.
The court distributes the amount to all of your creditors as a proportion of the debt owed them. Making these deposits voluntarily means you can avoid having to declare bankruptcy.
Even more importantly, you prevent your wages from being seized, if you are employed, or your income, if you are self-employed. Voluntary deposits also protect you from having furniture in your main residence that is used and needed by your family, such as your refrigerator, stove, tables, chairs, beds, etc., from seizure. In addition, when you settle your debt through voluntary deposits, you only pay 5% interest on them, no matter who your creditors are.
Note however that voluntary deposits do not provide protection from foreclosure or seizure of your personal vehicle. Furniture in your home can also be repossessed by the sellers if you still owe money on it. In addition, the voluntary deposit procedure exists only in Quebec, so if you move to another province, you are no longer protected against seizure.