calculating a division 1 consumer proposal
Is there a set minimum percentage of the debt a division proposal must meet, and is the cause of financial difficulty a determining factor?
Do creditors ever opt in favour of imposing a bankruptcy for retribution or because they would get their money faster, even if they were offered more money over 60 months in a consumer proposal?
The key requirement that legally must be met when filing a Division I Proposal is that at the very least the proposal must offer more to the creditors than would be available in a bankruptcy. However, we find that simply providing the creditors with a few pennies more than would be available in a bankruptcy is typically insufficient to obtain the percentage of support that is required.
As for whether the creditors opt in favor of imposing a bankruptcy or not, it has happened but it is not very common. Typically speaking as long as the creditors can see you are making a reasonable effort and a better recovery is expected with the proposal you find most creditors have been reasonable. Having said this, a creditor could simply not be willing to cooperate, so there is risk involved, but most often we find creditors would prefer to receive more money as opposed to less.