Consumer Proposal – Vote by Creditors

May 28th, 2007 by Questions

I have recently made a Consumer Proposal and after 45 days one of the creditors voted for the proposal and two voted against it. Two creditors did not vote. My understanding when I made the proposal was that if a creditor did not vote, it counted as an approval of the proposal. But now I am advised that a creditors meeting must be called. Can you explain why this must happen?


One Response to “Consumer Proposal – Vote by Creditors”

, A licensed trustee said:

This is going to get technical so bear with me…

In a consumer proposal every dollar that you owe to unsecurd creditors is entitled to a vote. To be accepted by your creditors 50% +1 of your dollars have to vote in favour of your proposal.

Here’s where it gets confusing: If creditors with 25% of your debts or more in total vote against your proposal then your trustee is required to book a meeting of creditors. At the meeting only creditors that have actually voted get counted. Again, we need 50% +1 to vote in favour for your proposal to be accepted.

Your trustee may have told you that creditors that don’t file or vote are considered to “accept” your proposal. That’s true and therefore people often confuse that with a vote “for”. It really means the creditor is allowing all of your other creditors to make their decision for them.

I hope this helps – if you’re still confused I suggest you go and speak to the trustee handling your proposal.

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