Consumer Proposal – Behind the Scenes
December 14th, 2009 by Questions
After the 45-day passage, and prior to the creditors meeting (which is being held due to the CP not passing), what goes on behind the scenes with the trustee and creditor.
1.Do they negotiate a new deal back and forth and then present it to the debtor at the meeting?
2. Does the creditor simply ask for more money and then the trustee will just tell me?
3. If there are still no proofs of claim submitted by the time of the creditors meeting, (45+21 days) or simply no contact made by the creditor to the trustee, then what happens? Does it collapse?
Posted from: Ontario
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December 15, 2009 at 9:12 am, Barton Goth - Goth & Company Inc. -Trustee in Bankruptcy said:
This will largely depend on the situation. Sometimes there is no need as the creditor has given a conditional vote that (i.e. conditional upon the proposal being amended to provide a higher amount that will be stipulated in the voting materials. This is the most common thing that happens, however, in other situations the trustee will have contact your creditors to determine what it will take for the proposal to be accepted. This could be contacting creditors who haven’t responded, or simply the creditors who hold the majority vote.
Then at the creditor meeting the trustee will simply tell you the result of these discussions / voting materials. It is at this time that you can decided either to a) meet their conditions; b) provide a counter offer to their conditions; or c) simply refuse to amend things and see what the creditors do.
Realistically we see most of the standard creditors may negotiate a little, but not significantly.
At the meeting, if there are no proof of claims present, or proof of claims but no votes, then the propsoal is deemed to be accepted. So it doesn’t collapse.