What Happens If My Creditors Reject My Consumer Proposal?

consumer proposal rejected

Consumer proposals are rarely rejected, however, if your creditors do reject your consumer proposal, all hope is not lost.

When you file a consumer proposal, your creditors have 45 days to vote on whether they will accept the terms that you offered (this includes terms such as the payment amount and the length of the proposal) or reject those terms.

Consumer proposals are accepted or rejected based on votes by your creditors. The voting system operates under a majority rules process. This means that if the majority of your creditors accept your proposal, the creditor who voted “no” must participate in the consumer proposal.

If the majority votes “no”, this does not mean the end of the process.

In most cases, creditors will request a change to the original terms that you offered because they know that if you declare bankruptcy, they will most likely get less than you offered in the proposal. This could mean asking for a few more dollars per month or they may ask for a change regarding the length of your payment plan – keep in mind that 60 months (five years) is the maximum amount of time that a proposal can last.

If you agree to meet the creditor’s terms, your consumer proposal is deemed to be accepted and you would continue making your payments. However, if the terms are not acceptable to you, a counter offer can be made to your creditors.

When considering your consumer proposal, your creditors may do one of the following:

  • Accept your terms as filed (vote yes);
  • Reject your terms (vote no);
  • Reject your terms and ask for a creditors meeting; or
  • Do nothing.

If your creditors reject your proposal, you have options. You can:

  • Renegotiate the terms of your proposal (i.e. amount or length);
  • Withdraw your proposal and file for bankruptcy; or
  • Withdraw your proposal and pursue a different debt relief option such as credit counselling, a debt management plan or work toward paying off your debt on your own.

If you’re considering debt relief options and worry that your consumer proposal will be rejected by your creditors, speak to a local consumer proposal administrator to discuss your situation and come up with an affordable proposal that will benefit both you and your creditors.

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Consumer Proposal Administrator

Consumer-Proposals.org is a free service provided by Bankruptcy Trustees in Canada to explain how consumer proposals work and why they are the #1 alternative to bankruptcy in Canada.

2 thoughts on “What Happens If My Creditors Reject My Consumer Proposal?

  • Elaine taylor

    My consumer proposal was rejected and it’s been a year gone by where we haven’t done anything, can I file for consumer proposal again or would I have to do the bankruptcy

    • Ted Michalos

      You may certainly file another consumer proposal to deal with your debts. Keep in mind why the first attempt was rejected and try to address any issues your creditors had before you file. If it was just about the amount of money you were offering then there’s not much point in filing a new proposal unless you can meet your creditors’ expectations…


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