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How Often are Consumer Proposals Refused?   arrow

The Vast Majority of Consumer Proposals Submitted by Our Clients are Accepted as Submitted, and the Vast Majority of those Proposals are Successfully Completed.

Consumer Proposals are a negotiated settlement agreement between a debtor and his creditors. The success or failure of a Proposal depends on the reasonableness of the Proposal and the creditors’ willingness to go along with it. In order for a Proposal to be successful, it must be perceived as being fair by both parties. If the creditors do not perceive your Proposal as fair or consider the offer insulting, it is very likely that they will summarily dismiss your Proposal and vote “NO”.

STORIES ABOUT PROPOSALS FOR PENNIES ON THE DOLLAR SIMPLY ARE NOT TRUE.

Creditors typically reject “pennies on the dollar” Proposals flat out. The common responses from creditors regarding these types of Proposals are, “If we are going to get so little, we don’t care, and we might as well let them go bankrupt.” This is the emotion you should try to avoid invoking in your creditors. In our experience, creditors who feel this way will continue to vote against your Proposal, even if you amend your Proposal and offer more money.

Our suggestion is, and our experience shows, that for your Proposal to be successful, you need to put your best offer forward, and not hold back for a counter-offer.

CREDITORS WILL BE REVIEWING YOUR EXPENSES

Creditors will be reviewing your budget or monthly expense summary, and will be looking for places where they believe you are wasting money. Creditors will typically be focusing on your discretionary expenses, such as: alcohol; entertainment; smoking; meals out; trips to coffee shops; vacations; esthetics and spa treatments, etc.

None of these things by themselves are deal breakers, but the old adage “everything in moderation” still stands. You should attempt to keep these items to a minimum if you want a positive vote from your creditors.

The prospect of creditors criticizing your budget and the probability of achieving a successful Proposal may seem gloomy, but it really isn’t.

INFORMED CONSUMERS LEAD TO SUCCESSFUL PROPOSALS

We believe that it is important to inform our clients, make them aware of the perspectives and pass on our experience in dealing with creditors. We would be pleased to met with you, explain the proposal option with you and see if we can make a proposal fit your circumstances. Our initial consultations are always FREE, and there is no cost to sit down with one of our Trustees nearest you and explore whether a Consumer Proposal option is right for you.