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September 5, 2017

Consumer proposals can reduce your debt by more than 90%

We see advertisements for LITs suggesting that you can reduce your debt by “up to 80%” but in some cases that can be more than 90%.  There are no fixed rules regarding how much you should offer your creditors in a proposal beyond the notion that a proposal should improve on the return that your creditors would get from a bankruptcy and must at a minimum cover the trustee’s fees.

We have seen proposals (very rare) accepted that offer less than one cent on the dollar and we have seen others that require payment of 100 cents on the dollar, and in some cases an additional 5% interest from the date of filing.

The average range for a proposal to be accepted by creditors seems to be 10-30% – but again each situation is different – to find out if a proposal is a good option for you, call the office to arrange a free intial consultation.  519-646-2222