Reasons for a Proposal not being Accepted
June 18th, 2012 by Questions
If you decide to do a consumer proposal what could be the reason for it not being accepted? Also if it takes awhile for the proposal do you have to make the minimum payment still until it’s accepted? What do you if you don’t have the money?
Posted from: Ontario
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June 18, 2012 at 4:41 am, A licensed trustee said:
As soon as you file a consumer proposal your payments on the debts that are included in your proposal stop – so does the interest.
As to why your proposal might not be accepted, there are 2 main reasons:
1) you haven’t offered your creditors enough money – it is called a proposal because you are making an offer to your crediotrs. In order to be accepted you have to offer them enough money to make it worth their while. At a minimum that means you must offer them more than they would receive if you were filing for bankruptcy and/or at least 1/3 of what you owe. This is the starting point and some creditors may ask for more…
2) you have done something financially which your creditors find offensive before you filed you proposal. For example, you put through a lot of purchases in the 3 months before you filed (much more than you might normally do). Or you took cash advances on your card(s) and paid off family and friends. Or maybe you took out a loan to buy a car, but never bought the car…