Consumer Proposals: What is the Acceptance Rate?

Consumer Proposal AcceptanceYou are filing a consumer proposal to deal with your debts, but obviously if your creditors don’t agree to your proposal, there’s not  much point in filing a proposal.

For a consumer proposal to be accepted, a majority of the dollar value of your creditors must accept the proposal.  So, if you have $50,000 in unsecured debts, you need $25,001 of those dollars to vote to accept the proposal.  If more than half of the dollars vote yes, all creditors must accept your proposal.

So what are the chances that your creditors will accept your proposal?

The government does not publish statistics on the acceptance rate of consumer proposals, so I did some research to determine acceptance rates at my consumer proposal firm.  You can read the full results of the study where I report that 99% of consumer proposals filed by Hoyes Michalos are accepted by the creditors.  Here’s the fine print:

  • These results only apply to our firm, in Ontario.  If you are outside of Ontario, or if you use another firm to act as your consumer proposal administrator, your results may vary.
  • In 2013, 88% of the proposals we filed were accepted as filed, and a further 11% required amendment (88% + 11% = 99%).  In other words, 11% of the time, creditors request more money.

The goal of every consumer proposal is to craft a deal that is acceptable to both you and your creditors.  If that is done properly, the chances of success are high.

How does this compare to other alternatives?  According to the Canadian Bankers Association only 10% of debt settlements are accepted by the banks, so it’s obvious that if you want to make a deal and avoid bankruptcy, a properly prepared consumer proposal may be the best solution.

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