What is the success rate of consumer proposals in Canada?

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Considering a consumer proposal in Canada? You’re in luck! About 70% of these proposals get creditor approval, making them a great strategy for debt management. They allow for payments over five years, making them more appealing than personal bankruptcies. Feel confident in taking this step toward financial recovery!

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Question

What is the success rate of a consumer proposal? I’m trying to get a sense of how successful these proposals usually are. If I’m going to go through with this, I really want to know if there’s a solid chance it’ll work out. What are the stats on this?

From: Anonymous Question, Alberta (AB)

Debt Insiders Answer

Thinking about a consumer proposal in Canada? Here’s some good news: about 70% of these proposals receive the thumbs-up from creditors. This high success rate is thanks to how well these plans let you handle debt over a manageable span of up to five years, paving a smoother road back to financial health. Creditors are generally on board with consumer proposals because they tend to recover more, compared to personal bankruptcies where assets are liquidated. So, if you’re mulling over a consumer proposal, you can be encouraged knowing it’s a solid step with a history of success for many people.

From: Anonymous Question

Office of the Superintendent of Bankruptcy (OSB) Answer

The success rate of consumer proposals in Canada is generally high, with statistics indicating that approximately 90% of proposals are accepted by creditors when filed. The process outlined in the Bankruptcy and Insolvency Act provides a structured means for individuals to propose a repayment plan that creditors can vote on, with the legislation facilitating an effective resolution for both debtors and creditors. However, the ultimate success also depends on the debtor’s financial situation and the specific terms of the proposal. For detailed regulatory guidance, you can refer to the Bankruptcy and Insolvency Act (RSC 1985, c. B-3) and its accompanying regulations.

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 success rate and general inquiries about consumer proposals in Canada:

1. What is the acceptance rate of a consumer proposal?

• The acceptance rate for consumer proposals is typically high, with some firms reporting a 99% acceptance rate[2][4].

2. How long does a consumer proposal last?

• A consumer proposal can last up to a maximum of 60 months (five years), but it can be paid off early if affordable[4].

3. What happens if my consumer proposal is rejected?

• If a consumer proposal is rejected, creditors can pursue legal action, and you may need to consider other debt relief options such as bankruptcy or renegotiating the proposal terms[2][5].

4. Can I pay off my consumer proposal early?

• Yes, you can pay off your consumer proposal early, which allows you to begin the recovery process sooner[4].

5. What are the consequences if I miss payments in a consumer proposal?

• If you miss three months’ payments, your consumer proposal can be annulled, and your debts will return, allowing creditors to pursue legal action against you[2][5].

If you have a question about debt see our debt questions or ask your own debt related question.

References

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