“AVOID BANKRUPTCY AND PAY ONLY PENNIES ON THE DOLLAR”
There are many things wrong with that statement!
Having worked in the Insolvency industry since 1995 we have seen many situations in which people are able to get out of debt and pay only pennies on the dollar of what they owe. This is achieved mostly through the filing of a formal proceeding such as a bankruptcy or a proposal.
However, not all situations are alike and as licensed trustees in bankruptcy we are not allowed to solicit people to make assignments into bankruptcy and we cannot make promises about unknown or unforeseeable situations.
After we have met and reviewed your options we may very well find that you could file a proposal for pennies on the dollar. The least we have seen anyone pay under a proposal was less than one penny on the dollar of the amounts owed. The most we have seen anyone pay under a consumer proposal was 105% of the face value of the claims against them.
Consumer proposals frequently successful in reducing the face value of the debts to somewhere between 10-40% of the original amounts owed, including fees, some are more and few are less. Without reviewing an individual’s specific situation it is impossible to predict what amounts will need to be paid for a proposal to be viable.
Since most people who meet with trustees are already in dire financial shape only a small percentage have options that are non-statutory, nonetheless we do see some people who don’t need the formality our services and can restructure through a refinancing of property or by restructuring investment assets.