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Division 1 Proposal

As I understand it I would have to go the route of a Division 1 as I have a $150k in unsecured debt, with a decent income $120k per year, but I need to avoid bankruptcy at all costs (due to employment restrictions). I understand that if my Division 1 proposal is not approved I have to declare bankruptcy. What is the likehood – that a Division 1 proposal will not be approved at the creditors meeting? And is there any way to avoid automatically being declared bankrupt if it were not approved – as perhaps if by Division 1 proposal is not appproved I can approach family – but I don`t want to take the chance of automatically being declared bankrupt?

Posted from: Ontario

One Response to “Division 1 Proposal”

Barton Goth – Goth & Company Inc. -Trustee in Bankruptcy said...

Unfortunately this is something that no official statistics are published on and I can only assume varies greatly by trustee’s office. In our office we have found that the vast majority of proposals, regardless of whether we are talking a consumer or a division 1 proposal are accepted.

Overall most creditors are open to the idea as long as you are making a realistic offer. But it is important to discuss with a local trustee so they can look at the composition of your debts and advise you accordingly.