Are Consumer Proposals often rejected by Creditors?
The good news is NO, consumer proposals are NOT often rejected by creditors. Why is this? A consumer proposal will most likely seem like attractive solutions for your creditors, as well as you, because it ensures that they will be able to receive a portion of what owes them. The administrator of your proposal will fully explain to you how the terms of your specific proposal will likely be viewed by your creditors. It’s true that in most cases, proposals do not even require a meeting of creditors.
This is the time to rely on your administrator’s valuable experience in dealing with the proposal process. When a consumer proposal is received by your creditors, they will typically perform a calculation to determine how much money they would gain through the proposal, compared to how much they would receive you were to declare bankruptcy instead. Taking this into account, they may determine that the proposal offers greater returns for them than a bankruptcy would. Of course, your proposal administrator will have done these calculations as part of the process of preparing the proposal, and they will have structured it in a way that is attractive to your creditors.