What happens if creditors reject a consumer proposal?
May 30th, 2012 by Questions
What will happen if my creditors refuse my consumer proposal?
Posted from: Quebec
One Response to “What happens if creditors reject a consumer proposal?”
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May 30, 2012 at 2:03 pm, A licensed trustee said:
Creditors have the right to vote, against, counter offer or not vote at all in a proposal. Typically when a creditor votes no they also send along alternate terms that they will accept. The only cases that I recall where a creditor voted no and was not interested in any alternate terms are when the creditor has concerns about the debtors conduct prior to filing. For example, you borrowed $20,000 to buy a vehicle from a bank, but use the moeny for something else instead…
If creditors with more than 50% in dollar value of your debts for against your proposal then it is said to be rejected by your creditors and cannot continue.
Voting is something you should discuss in detail with your trustee BEFORE you file. Most trustees can give you a fairly accurate summary of how each of the major creditors will vote.