How Often Are Consumer Proposals Accepted By Creditors

2009-12-29   minute read

It does depend on what type of debt settlement you're looking at. There are a few different kinds: Proposals done under federal legislation (Consumer Proposals and Division I Proposals); Orderly Payment of Debts programs offered in some provinces (this is a debt consolidation done under provincial legislation); consolidation programs (offered by credit counselling firms - participation by creditors is voluntary); and informal settlements (a negotiation between you and your creditors). I suspect that you're asking about Consumer Proposals, so I'll talk about those. If you want information on one of the others types of settlements, just post a comment or get in touch with me and I can give you more info. With Consumer Proposals the amount you offer to your creditors to settle your debts is based on your financial situation, your ability to pay, and how much debt you have. To do a Consumer Proposal, you'd need to talk with a licensed trustee who will assess your situation, advise you how much you'd have to offer to your creditors to settle the debts, and work out a manageable payment program for you. The Proposal is then sent out to your creditors and they will reply to the trustee indicating whether or not they will accept the settlement. The creditors vote as a group, so if over 50% in dollar amount (each of your creditors has one vote for every dollar that you owe them) are in agreement with the settlement, all of your unsecured creditors must participate - they are required to accept the settlement. We have a high rate of acceptance with our Consumer Proposals. The key to getting creditor approval is to determine a settlement amount that is manageable for you and acceptable to your creditors. So, because the amount you'd have to offer is very specific to your particular financial situation, the best thing to do is go to see a trustee. That will give you a very good sense of what your payments would be and whether or not the amount you can afford would be acceptable to your creditors. Judy Scott, Trustee Meyers Norris Penny Limited Port Coquitlam, Burnaby British Columbia 604-949-2100 [email protected]

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