Are proposals most often accepted?

Also, what are their drawbacks?

Posted on Thursday, December 4, 2008 | Filed under: Consumer Proposals
 posted by Questions @ 7:10 am 1 Comment
1 Expert Comment:

 At December 6, 2008 | 3:11 pm , Barton Goth, Trustee in Bankruptcy Said...

We find the vast majority of proposals are accepted, but realistically it typically comes down to what your cash flow is and wheter or not you are able to make a reasonable offer to your creditors.

In terms of the pro’s and cons of a proposal. They are largely as follows:

PRO:
- you do not lose your assets
- you do not have a severe of an impact on your credit rating as you would in a bankruptcy
- your payments are fixed and don’t fluctuate if your income increases
- often you can bring your debt down to a more manageable level then they are currently at
- no interest is charged
- there is a court sanctioned process so once the creditors agree they cannot change their minds

CON:
- it will often last longer than a bankruptcy
- it always is more costly than a bankruptcy
- because the payment is fixed if your income decreases you may find it difficult to make your payments

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