Another Div 1 Proposal question
Thankyou for your reply preveously, it makes me feel better every day being clean, and starting a new life to rebuild.
I have noticed in preveous blog reading that a consumer proposal is generaly accepted “easier”, than a division 1 proposal may be accepted. I realize passing votes, etc. are different. But what comes to my mind, should that filing of a division 1 proposal be rejected, the person is automaticaly bankrupt. Add in the mix that the Div 1 proposal would offer quite drasticly more money than a bankruptcy. Does this reason that a div 1 proposal, with a bankruptcy in place should it be rejected, put a lot of pressure to creditors to find their best interests.
The reason most people make the statement that a consumer proposal is easier to get accepted is that you only need a 50% majority of the voting creditors, whereas in a Division I Proposal you require 50% in number and 2/3 in value of the voting creditors. Although in practice, despite requiring a higher percentage of the vote, I haven’t found it any more difficult to get a Div I proposal accepted vs. the Consumer proposal. In my opinion I think this is partly related to the automatic bankruptcy provisions of the Div I, but there are also a number of other factors that you also have to factor in (i.e. cash flow, lifestyle, level of repayment…). Therefore it is important that you use a licensed trustee who is familiar with the specific ramifications you must encounter.