519-646-2222How proposals work
LIT Files Proposal:
Proposals can only be made to your creditors through a Licensed Insolvency Trustee. Understanding how proposals work is quite simple.
Assessment:
The trustee assesses your situation too determine how much you can afford to pay to your creditors and suggests a payment arrangement based on your capacity to pay.
Voting on Proposal:
The proposal is sent to your creditors, who then have 45 days to vote on the proposal’s acceptance. The creditors have three choices, they can vote for the proposal, they can vote against the proposal or they can abstain from voting. All you need is 50% of the voting creditors to agree to accept the proposal for it to become effective.
Tabulating Votes and Negotiating:
Only those who vote for or against are counted in determining of the proposal passes or not. If most creditors vote against the proposal that doesn’t necessarily mean they won’t accept a proposal, it just means they are looking for something else, usually more money. That’s when the trustee will try to negotiate a further, alternative, payment plan, or provide a stronger, more compelling reason for the creditors to accept the original proposal.