Consumer Proposal Acceptance Rates

Consumer proposal applicants often worry if their proposal will get accepted and what to do if it’s not. Today we’d like to share some thoughts and statistics to calm your fears.

We completely understand that worrying about acceptance of your proposal is normal since it has a significant impact on your financial future. However, we’d like to suggest that worry is not necessary at all – proposal rejections are very rare. And if they do happen, it’s not the end of the world as steps can be taken to resubmit and negotiate.

Although the government does not publish statistics on the acceptance rate of consumer proposals at our firm – Brief & Associates Inc., we can say that 95% of our proposals accepted by creditors. This means that 9.5 out of 10 proposals we file get approved.

You may ask why our success rate is so high…that’s because we structure proper and fair proposals, which are a win-win for both parties.

Let me explain. Consumer proposals are vehicles that enable debtors to renegotiate their debts and allow creditors to collect at least some monies owed to them – at least more than they would in a bankruptcy. As long as creditors realize more benefits from a proposal than they would with bankruptcy they are likely to accept it.

We’ve been in business for over 30 years and know how to structure a proposal so that creditors are happy to get paid back a reasonable portion of the debt and debtors enjoy a reduction of debts, zero interest rates, and acceptance of the proposal.

How the acceptance process works:

Creditors have 45 days to review the proposal. During the 45 days they can accept, reject or renegotiate the terms/payments of the proposal. The proposal is accepted only if a majority of creditors vote in favor of it – 50.01%.

For example, let’s say the debtors’ total unsecured debt is $30,000 then $15,001 worth of creditors have to vote in favor for the proposal to be accepted. Each dollar of debt counts as 1 vote. So if the debtor has 1 creditor that controls $16,000 of the $30,000 and they are not willing to budge, it may be problematic.

However, creditors also realize that the debtor may choose to go bankrupt and they may not get anything at all. It is our job as trustees to structure a proposal that’s fair to both parties. A consumer proposal that gets accepted is a win-win for everyone.

What happens is the proposal is rejected:

If for some reason your proposal is rejected we can do 3 things:

• Make changes to the payment terms and resubmit it
• Explore other avenues to get your debt under control
• File for bankruptcy

In most cases creditors will accept the revised proposal as they want to recover some money and are well aware that if you file for bankruptcy they may get very little or nothing at all.

Free Consultation

If you’re struggling to pay off your debt and would like to hear more about available debt management options give us a call. We offer a free no obligation consultation and will gladly answer any questions you may have and provide recommendation on what may be best in your particular situation.