What can I do if my consumer proposal is rejected?

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Hey there! If your creditors reject your consumer proposal, don’t stress. Talk to your Licensed Insolvency Trustee about adjusting the proposal to entice creditors, like modifying payments. If that doesn’t work, consider direct negotiations or other debt solutions. And remember, bankruptcy is a last resort to reset your finances.

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Question

What happens if creditors reject my consumer proposal? I want to know what I can do if my creditors don’t agree to my consumer proposal.

From: Anonymous Question, British Columbia (BC)

Debt Insiders Answer

Hey there! If your creditors turn down your consumer proposal, don’t fret – you’ve got some options to consider. First up, chat with your Licensed Insolvency Trustee (LIT) about tweaking the proposal to make it more tempting for your creditors. This might mean upping your payments or stretching out the time you have to repay – all within the rules, of course! If changes don’t sway them and your proposal still doesn’t fly, you might find yourself back at square one, facing the debt reality you started with. But here’s a silver lining: creditors could be more open to direct chats or exploring a different route to settle your debts.

Now, if juggling debt feels impossible despite all efforts, bankruptcy might be on the horizon – but think of it as the last straw. Sure, it’s got its downsides, like shaking up your credit score and maybe losing some assets, but it can also hit the reset button on your financial life. Just make sure to get a good chinwag going with your LIT to figure out if that’s the best move for your unique situation. Remember, understanding your options puts you in the driver’s seat when dealing with creditors and charting the course for your financial future.

From: Insider Scott

Office of the Superintendent of Bankrupty (OSB) Answer

If creditors reject your consumer proposal, you have several options:

1. Revise the Proposal: You may revise your consumer proposal to address the concerns of your creditors. This can include adjusting the offered payment terms or increasing the amount being offered. The amended proposal must be submitted for further consideration.

2. File for Bankruptcy: If your consumer proposal is rejected, you can opt to file for personal bankruptcy as a way to manage your debts. Under the Bankruptcy and Insolvency Act (RSC 1985, c 12 (2nd Supp)), filing for bankruptcy can offer a fresh start, although it has its consequences.

3. Seek Legal Advice: Consulting with a licensed insolvency trustee or legal expert can provide you with insights into your options and help you navigate the situation effectively.

Refer to the Bankruptcy and Insolvency Act (RSC 1985, c 12 (2nd Supp)) for specific provisions related to proposals and bankruptcy processes, particularly sections that detail the requirement for creditor approval and the implications of rejection.

From: This answer is provided by scanning the OSB Bankruptcy & Insolvency Act and related directives

Related Questions

Here are the top 5 most frequently asked questions related to the rejection of a consumer proposal, based on common concerns and search trends:

1. What happens if my creditors reject my consumer proposal?

If your creditors reject your proposal, the protection from collection actions ceases, and you may need to consider alternative debt relief options such as revising the proposal, credit counselling, or filing for bankruptcy.

2. Can I resubmit a consumer proposal if it is rejected?

Yes, you can resubmit a revised consumer proposal after addressing the reasons for the initial rejection, but you can only do this once.

3. How long do creditors have to vote on a consumer proposal?

Creditors have 45 days to vote on your consumer proposal after it is filed with the Office of the Superintendent of Bankruptcy (OSB).

4. What are the common reasons for a consumer proposal to be rejected?

Creditors commonly reject a consumer proposal if the offer is not feasible or realistic, or if it leaves them with a significant financial loss compared to other debt solutions.

5. What are my options if my consumer proposal is rejected and I cannot resubmit it?

If your consumer proposal is rejected and you cannot resubmit it, you may need to consider other debt relief options such as credit counselling, debt consolidation, or filing for bankruptcy.

References

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