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Creditors Vote on the Proposal

Once your consumer proposal is filed, your creditors have 45 days to respond with their votes. This is a waiting period for you and the administrator.

How creditors could vote

Your creditors may do one of the following:

  • Vote to accept your proposal
  • Vote to reject your proposal
  • Vote to accept your proposal if you agree to alternative terms which they will provide
  • Submit a proof of claim, but not bother to vote for or against your proposal
  • Do nothing at all, not even submit a proof of claim

The administrator is allowed to contact your creditors to remind them to submit a proof of claim and to ask them to vote, but the administrator may not solicit votes on your behalf. (Being an officer of the court, the administrator does not work for you and must remain impartial.)

Outcome of the vote

At the end of the 45 day period, if your creditors agree to your proposal, and if there are no objections within a further 15 days, it will be deemed to have received court approval and go forward.

If the vote is 25% or more to reject or to alter the terms of your proposal and the creditors request a meeting, the administrator is required to schedule a First Meeting of Creditors. The purpose of this meeting is to see if an agreement can be reached with a majority of your creditors that have voted on your consumer proposal.

In the negotiation with creditors, the administrator will advise you how best to proceed. You could increase the amount you are offering to pay your creditors so that they accept the proposal, or you could allow the proposal to be rejected, which may mean you end up declaring bankruptcy.

From this meeting, your consumer proposal can only go one of two ways.

  • It will be accepted by your creditors.
  • It will be rejected by your creditors and will end right there.

Do creditors often reject a consumer proposal?

The good news is creditors accept most consumer proposals. Rejection does happen, but usually the creditor will offer to accept a different amount.

For a free consultation on whether a consumer proposal is right for you, contact a Licensed Insolvency Trustee near you.