Consumer Proposal Acceptance Rate: Why 99% Get Approved

Consumer proposals filed through experienced Licensed Insolvency Trustees have a 99% acceptance rate. Nearly every proposal submitted gets approved by creditors. This high success rate comes from LITs pre-negotiating with major creditors before filing and structuring offers that creditors prefer over bankruptcy. Creditors accept consumer proposals because they recover 30-50% of debt. Bankruptcy yields just 5-15%. The process costs less to administer and debtors keep their assets and income stability. Under the Bankruptcy and Insolvency Act, proposals are deemed accepted if creditors don’t respond within 45 days. This happens in 83% of cases without requiring any creditor meeting.

Why 99% of Consumer Proposals Get Approved

Hoyes Michalos tracked thousands of consumer proposals filed between 2011 and 2013. Their data shows 99% success including amendments. The breakdown reveals how proposals move through the system.

88-92% of proposals pass as originally filed without any changes. Creditors review the terms and vote yes within the 45-day window. These proposals offer creditors more than bankruptcy would yield and demonstrate realistic repayment ability.

7-11% require amendments before final acceptance. Creditors request higher payments or shorter terms at a Meeting of Creditors. Debtors accept the amendments and proposals pass on second vote. These still count as successful outcomes.

Less than 1% fail outright. These rare rejections happen when proposals offer substantially less than bankruptcy recovery or when debtors can’t meet basic eligibility requirements.

Only 11-17% of proposals trigger a Meeting of Creditors. The vast majority pass through deemed acceptance without requiring any meeting. This means 83-89% of proposals become legally binding without creditors taking any action.

Licensed Insolvency Trustees achieve these success rates because they’re federally regulated professionals. They understand creditor thresholds and acceptance patterns. LITs contact major creditors before filing to confirm terms will be accepted. When you sign your proposal, the deal is already structured for approval.

The pros and cons of consumer proposals consistently cite high acceptance as a major advantage. Contrast this with unlicensed debt settlement companies. These firms have roughly 10% success rates. They can’t file consumer proposals legally. They offer no protection from wage garnishment or lawsuits during negotiations. Their fee structures often leave clients worse off than when they started.

Ready to stop collection calls and start your path to debt relief? Find a Licensed Insolvency Trustee for a free consultation with no upfront costs.

How Creditor Voting Actually Works

• 45-day voting period starts on your filing date and includes all calendar days including weekends and holidays
• Majority by dollar value means you need approval from creditors representing more than 50% of your total debt, not 50% of creditors by count
• Deemed acceptance happens automatically if no creditors request a Meeting of Creditors within 45 days and the voting period expires
• Meeting of Creditors must be held if creditors representing 25% or more of your debt request one within the voting window per Section 66.15 of the Bankruptcy and Insolvency Act
• Proof of Claim requirement means only creditors who file formal claims get to vote. They must file with the Licensed Insolvency Trustee.
• 15-day court review period follows deemed acceptance where creditors can request a court hearing if they believe the proposal violates the Bankruptcy and Insolvency Act
• Creditor silence equals yes because creditors who ignore the proposal are counted as accepting under Section 66.27 of the BIA

Brandon from Winnipeg owed $42,000 total. TD held his $28,000 credit card debt. CIBC held an $8,000 line of credit. Four payday lenders split the remaining $6,000. TD voted yes on Brandon’s proposal. That single yes vote represented 66.7% of his debt. The other five creditors could have all voted no and Brandon’s proposal would still pass.

The dollar-value rule protects you from small creditors blocking your financial recovery. One major creditor’s acceptance often carries the entire proposal. This is why Licensed Insolvency Trustees focus pre-negotiation efforts on your largest creditors first.

Why Creditors Almost Always Say Yes

Banks run the math before voting. A consumer proposal offering 35 cents on the dollar over five years beats 10 cents on the dollar after 18 months of bankruptcy proceedings with administrative costs.

Creditors face real costs in bankruptcy. They must track asset liquidation. They attend court proceedings. They file extensive documentation. They wait months for distributions. Asset sales rarely recover full value. Trustee fees come off the top. The net recovery is minimal.

Consumer proposals eliminate these costs. The Licensed Insolvency Trustee administers everything. Monthly payments arrive on schedule. Creditors receive structured distributions without additional effort. Default rates are low because LITs structure affordable payments based on your actual income and expenses.

Asset and income preservation matters to creditors. When you keep your car, you maintain transportation to work. When you keep home equity, you have stability. This stability means you’re more likely to complete all 60 months of payments. Creditors prefer reliable long-term recovery over uncertain short-term liquidation.

Jasmine from Calgary owed $38,000 in unsecured debt. She owned a 2017 Honda Civic worth $9,000. Her consumer proposal offered creditors $13,200 over five years at $220 monthly. In bankruptcy, her car would be seized. After trustee fees, creditors would net roughly $6,000. The proposal offered more than double the bankruptcy recovery. Jasmine kept her car. Every creditor voted yes within 30 days.

CRA and Major Creditor Acceptance Patterns

Canada Revenue Agency accepts 70-85% of consumer proposals when debtors meet six specific requirements.

You must offer CRA more than bankruptcy would yield. Calculate what CRA would receive if you filed bankruptcy. Your proposal must exceed that amount. CRA won’t vote yes if bankruptcy gives them a better recovery.

You must offer at least 25-40% repayment on tax debt. CRA has published minimum thresholds. They won’t accept pennies on the dollar even if it exceeds bankruptcy. This is policy mandate, not pure financial calculation.

All tax returns must be filed before submission. CRA won’t vote on proposals from taxpayers with unfiled returns. File all outstanding returns for the past six years minimum before your Licensed Insolvency Trustee submits your proposal.

You must demonstrate realistic payment ability. CRA reviews your income and expense statement. They verify you can afford the proposed monthly payments. Lowball income reports get rejected.

Your tax compliance history matters. Pattern non-filers face higher scrutiny. You’ll need to offer higher recovery percentages to overcome poor compliance history.

You must commit to future tax compliance. Promise to file all future returns on time and pay any future taxes owing. CRA wants assurance you won’t create new tax debt during your proposal.

David from Toronto owed $52,000 including $18,000 in CRA tax debt. He filed his proposal before updating 2024 and 2025 tax returns. CRA voted no. His proposal failed. He updated both returns, discovered he owed an additional $3,200, and amended his debt total to $55,200. His Licensed Insolvency Trustee restructured the offer to 30% repayment. CRA voted yes. The proposal passed on the second attempt.

Major banks accept 95% of reasonable consumer proposals. TD, RBC, CIBC, Scotiabank, and BMO follow consistent acceptance patterns. If your proposal offers more than bankruptcy and demonstrates affordable payments, banks vote yes. They’re sophisticated creditors who understand the math.

Credit card companies accept 90% of proposals. Credit cards are unsecured debt. Card issuers have no collateral to seize. They face high losses in bankruptcy. Proposals offering 30-50% recovery get routine approval.

Payday lenders accept 85% of proposals despite being your smallest creditors. They’re unsecured and lowest priority in bankruptcy. They’d receive nothing if you filed bankruptcy. Even modest proposal offers beat their bankruptcy alternative.

Collection agencies accept 80-90% depending on the original creditor’s position. Agencies vote based on instructions from the creditor who owns the debt. If the original creditor would accept, the agency accepts.

Owe money to CRA? Find an LIT who specializes in tax debt and get a free assessment of your consumer proposal options within 48 hours.

What Happens If Creditors Reject Your Proposal

Less than 1% of proposals filed by experienced Licensed Insolvency Trustees fail completely. Most apparent rejections are actually amendment requests. Creditors want better terms but are still negotiating.

Amendment requests happen at the Meeting of Creditors. Major creditors propose new terms. They want higher monthly payments or shorter repayment periods. You can accept the amendment and revote immediately. You can decline the amendment and withdraw your proposal. You can negotiate further.

Devon from Halifax filed a proposal offering $245 monthly over 60 months. His largest creditor requested a Meeting of Creditors. At the meeting, they proposed $290 monthly instead. Devon agreed. All creditors voted yes on the amended terms. His proposal passed. The amendment delayed his timeline by six weeks but achieved debt relief.

Outright rejection annuls your proposal immediately—see what happens after consumer proposal annulment if you later miss payments after acceptance. Your debts are reinstated to their full original amounts. You get credit for any payments already made to the trustee. Those payments are distributed to creditors. Creditor collection activities resume within 24 hours. Wage garnishment applications can be filed within two weeks. Interest resumes at original rates.

You have three options after rejection. File an amended proposal with better terms addressing creditor concerns. File a completely new proposal after waiting to preserve your rights. File for bankruptcy as your fallback legal option.

Re-filing within six months loses automatic stay protection. Collections can continue during the first 30 days of your new proposal. Wait six months and you get full automatic stay protection from day one.

Nina from Mississauga owed $31,000. She offered $9,500 over five years. Her major creditor rejected the offer and wanted $12,500. Nina declined to amend. She withdrew her proposal. Collection calls resumed within hours. One creditor filed wage garnishment paperwork within 10 days. Interest restarted at 19.99% on her credit cards. That’s $6,200 annually. Every month of delay cost her $517.

Concerned about your specific situation? Get expert guidance on structuring an acceptable proposal from a Licensed Insolvency Trustee at no upfront cost.

The 45-Day Deemed Acceptance Rule

Deemed acceptance is your most likely outcome. 83% of consumer proposals pass this way. No meeting happens. Creditors simply don’t respond within 45 days. Their silence counts as acceptance under Section 66.27 of the Bankruptcy and Insolvency Act.

The 45-day clock starts on your filing date. It includes all calendar days. Weekends count. Holidays count. February’s short month doesn’t extend the deadline. Day 45 is exactly 45 days later.

Creditors must request a Meeting of Creditors during this window. They need 25% of total debt value to force a meeting. If no request comes in, your proposal is deemed accepted on day 45 at midnight.

The 15-day court review period follows deemed acceptance. Creditors can request a court hearing if they believe your proposal violates the Bankruptcy and Insolvency Act. This almost never happens. Court approval becomes final on day 60.

Collection calls stop on day zero. The automatic stay takes effect the moment your Licensed Insolvency Trustee files your proposal. Creditors must stop all collection activity. No phone calls. No letters. No wage garnishment. No lawsuits. Violations of the stay can result in penalties.

Devon from Halifax filed his proposal February 3, 2026. Collection calls stopped that day. His 45-day window ran through March 19. No creditors requested a meeting. His proposal was deemed accepted March 19. The court review period ended April 3. Court approval became final. His first payment was due May 3. Total timeline from drowning in debt to structured repayment: 90 days.

Your monthly payment amount is fixed in your proposal. Interest stops accruing on filing day. You know exactly what you’ll pay each month for the next 36-60 months. No surprises. No rate increases. No minimum payment games.

How LITs Structure Proposals to Ensure Acceptance

Licensed Insolvency Trustees contact your major creditors before filing. They explain your financial situation. They outline proposed repayment terms. They ask whether the creditor would vote yes. This pre-negotiation happens before you sign anything.

RBC holds $24,000 of your $45,000 debt. Your LIT calls RBC’s insolvency department. They confirm RBC will accept $280 monthly over 60 months. That’s $16,800 total or 37% recovery. RBC’s threshold is met. Your LIT builds the proposal around this confirmed acceptance.

Financial analysis determines what you can actually afford. LITs review your income using pay stubs and tax returns. They calculate your expenses using bank statements and receipts. They apply Office of the Superintendent of Bankruptcy surplus income guidelines. The resulting number is what you can sustainably pay monthly.

Bankruptcy comparison establishes the minimum offer. Your LIT calculates what creditors would receive if you filed bankruptcy instead. They assess your assets. They apply provincial exemptions. They calculate surplus income payments you’d make during bankruptcy. Your consumer proposal must offer creditors more than this bankruptcy alternative.

Payment structuring balances two competing needs. Creditors want maximum recovery. You need affordable payments. LITs extend terms to the full 60-month maximum when needed. A $50 drop in monthly payment costs you nothing extra. It costs creditors zero additional risk. It makes your proposal sustainable.

Term optimization uses time as a variable. $16,800 paid over 36 months requires $467 monthly. The same $16,800 over 60 months needs just $280 monthly. You pay the same total. Creditors receive the same amount. The longer term makes payments manageable.

Strategic advice leverages creditor behavior patterns. LITs know CRA requires 25-40% offers. They know major banks accept proposals exceeding bankruptcy by 15-20%. They know payday lenders accept almost any offer because they’re unsecured. This knowledge shapes proposal structure.

Why do Licensed Insolvency Trustees achieve 99% acceptance? Proposals are structured to pass before filing, not hoping for approval after. The acceptance is built into the design. Pre-negotiation confirms major creditors will vote yes. Financial analysis proves payments are sustainable. Bankruptcy comparison guarantees creditors receive more than their alternative.

Simone from Montreal tried negotiating directly with creditors for six months. She offered $150 monthly on $39,000 debt. Creditors ignored her calls. She had no legal protection. Collection calls continued. Interest kept accumulating at 21% annually. She finally hired a Licensed Insolvency Trustee. The LIT calculated she could afford $280 monthly. Over 60 months that’s $16,800 total. 43% recovery for creditors. The LIT pre-negotiated with RBC, her largest creditor. RBC confirmed acceptance. The proposal was filed. Deemed accepted on day 45. Difference: six months of failed DIY attempts versus 45 days to resolution.

Common Reasons the Rare 1% Get Rejected

• Insufficient financial offer where your proposal pays creditors less than bankruptcy would yield
• CRA non-compliance including unfiled tax returns or established pattern of non-filing
• Unrealistic repayment terms with proposed payments you clearly cannot afford based on your verified income
• Eligibility violations such as owing more than $250,000 excluding mortgage or being ineligible under BIA requirements
• Asset or income concealment discovered during creditor review or trustee investigation
• Major creditor blocking vote when a single creditor holds more than 50% of your debt and votes no
• Recent large transactions including asset transfers or unusual spending immediately before filing that raise fraud concerns

Insufficient offers get rejected because creditors aren’t charities. You owe $40,000. Bankruptcy would yield creditors $8,000. You offer $6,000 in your proposal. Creditors vote no. They’d rather push you into bankruptcy and receive the higher amount.

CRA rejects proposals from taxpayers with unfiled returns. You owe $16,000 in tax debt. You haven’t filed 2024 or 2025 returns. You submit a consumer proposal. CRA votes no automatically. File all outstanding returns first. Then resubmit your proposal.

Unrealistic payments fail creditor scrutiny. You report $2,800 monthly net income. You list $2,600 in basic expenses. You offer $400 monthly payments. Creditors and your Licensed Insolvency Trustee both know the math doesn’t work. You can’t sustain those payments. The proposal gets rejected or never filed.

Eligibility violations block proposals from the start. You owe $280,000 excluding your mortgage. Consumer proposals cap at $250,000. You don’t qualify. You need a Division I proposal instead. Or you owe $180,000 but you’re currently in bankruptcy. You can’t file a consumer proposal while in bankruptcy. Your existing bankruptcy must be annulled or completed first.

Asset concealment destroys creditor trust. You own a rental property worth $95,000 with $80,000 mortgage. You don’t disclose it on your Statement of Affairs. A creditor discovers the property. They vote no and request court review. Your proposal fails. Creditors question everything else you reported.

Major creditor blocking happens when debt concentration is extreme. You owe $60,000 total. One creditor holds $35,000. That’s 58% of your debt. If that single creditor votes no, your proposal fails mathematically. You need their yes vote. Your Licensed Insolvency Trustee focuses all pre-negotiation efforts on satisfying that one creditor.

Alicia from London, Ontario owed $47,000 including $16,000 to CRA. She hadn’t filed her 2025 tax return. Her Licensed Insolvency Trustee advised filing the return before submitting the proposal. Alicia rushed the process. She filed her proposal without updating her returns. CRA voted no. The proposal failed. Alicia filed her 2025 return. She discovered she owed an additional $2,800. Her debt total became $49,800. She filed a new proposal four months later offering 32% repayment. CRA accepted. All other creditors followed CRA’s lead. Cost of rushing: four extra months of 21% credit card interest totaling $1,970.

Every rejection reason is preventable with proper Licensed Insolvency Trustee guidance. LITs screen for these issues before filing. They won’t submit proposals structured to fail. They protect their 99% success rate by refusing to file proposals that don’t meet basic acceptance criteria.

Don’t risk preventable rejection. Schedule a free Licensed Insolvency Trustee consultation to get expert review before filing.

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Real-World Scenarios

Devon - Halifax, Nova Scotia

Devon owed $44,200 total across three creditors. TD held his $22,800 credit card at 19.99% APR. CIBC held an $11,500 line of credit at 12.5%. BMO held a $9,900 credit card at 21.99%. Devon earned $58,000 annually or $3,850 monthly net. He was a single parent renting an apartment. He owned his 2015 Mazda CX-5 outright worth roughly $12,000.

His Licensed Insolvency Trustee calculated Devon could afford $310 monthly over 60 months. That’s $18,600 total representing 42% recovery for creditors. TD was his largest creditor holding 51.6% of his debt. The LIT pre-negotiated with TD’s insolvency department. TD confirmed acceptance of the terms.

Devon filed his consumer proposal February 3, 2026. Collection calls stopped immediately. No creditors requested a Meeting of Creditors during the 45-day window. His proposal was deemed accepted March 19. The 15-day court review period ended April 3. Court approval became final. His first $310 payment was due May 3.

In bankruptcy, Nova Scotia’s vehicle exemption is only $6,500. Devon’s car worth $12,000 would be seized. After trustee fees, creditors would receive approximately $9,000 or 20% recovery. The consumer proposal offered double the bankruptcy recovery. Devon kept his car. He maintained transportation to work. Every creditor voted yes through deemed acceptance.

Jasmine - Calgary, Alberta

Jasmine owed $67,900 total to four creditor types. RBC held a $28,400 credit card. Scotiabank held a $15,200 line of credit. Canada Revenue Agency held $18,300 in tax debt from 2023, 2024, and 2025. Money Mart held $6,000 across three payday loans. She earned $72,000 annually as a self-employed contractor. She owned a condo with $14,000 in equity.

Jasmine tried filing her first proposal offering $21,000 or 31% recovery. CRA voted no. She hadn’t filed her 2025 tax return. CRA requires all returns current before voting on proposals. Her proposal failed.

Her Licensed Insolvency Trustee explained CRA’s requirements. File all outstanding returns. Offer at least 25-40% repayment. Exceed bankruptcy recovery. Demonstrate future compliance. Jasmine filed her 2025 return. She discovered she owed an additional $3,200. Her total debt increased to $71,100.

The LIT restructured her proposal. Jasmine could afford $390 monthly over 60 months. That’s $23,400 total or 33% recovery. The offer met CRA’s minimum threshold. It exceeded what CRA would receive in bankruptcy. Jasmine signed a compliance agreement promising to file all future returns on time.

CRA accepted the revised proposal. When CRA votes yes, other creditors typically follow their lead. RBC, Scotiabank, and Money Mart all voted yes. The proposal was deemed accepted on day 45. Jasmine kept her condo equity. She avoided bankruptcy. She structured her tax debt into affordable payments.

Tom - Mississauga, Ontario

Tom owed $52,700 across multiple creditors. Capital One held a $19,200 credit card. CIBC held a $14,800 credit card. Fairstone held a $12,100 personal loan at 29.9% APR. Four collection agencies held $6,600 in old debts. Tom earned $64,000 annually. His spouse earned $48,000. They had two children. They recently sold an investment property but used proceeds for living expenses, not debt repayment.

His Licensed Insolvency Trustee structured a proposal offering $245 monthly over 60 months. That’s $14,700 or 27.9% recovery. Capital One held 36.4% of his debt. Capital One requested a Meeting of Creditors. They wanted higher recovery.

The Meeting of Creditors was held at the LIT’s office. Capital One proposed $300 monthly instead of $245. That would total $18,000 or 34% recovery over 60 months. Tom reviewed his budget with his LIT. He could afford the higher payment by cutting discretionary spending. He accepted the amendment.

All creditors voted yes on the amended terms at the meeting. Tom’s proposal passed. The amendment added six weeks to his timeline versus deemed acceptance. His original proposal was filed August 12, 2025. The Meeting of Creditors happened September 18. The amended proposal was accepted the same day. Court approval came October 3. His first $300 payment was due November 3.

This represents the 7-11% of proposals requiring amendments. Even with the amendment, Tom achieved debt relief. His case counts in the 99% success rate. The key difference: amendments are not rejections. They’re negotiations. Creditors wanted more. Tom agreed. Everyone voted yes.

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Consumer proposals achieve 99% acceptance because Licensed Insolvency Trustees structure them for success before filing. Pre-negotiation with major creditors confirms acceptance. Financial analysis ensures sustainable payments. Bankruptcy comparison guarantees creditors receive more than their alternative. The 45-day deemed acceptance rule means 83% of proposals pass without requiring any meeting.

Creditors vote yes because consumer proposals offer superior recovery versus bankruptcy. Banks, credit card companies, and even CRA follow rational financial decisions. When your proposal pays them 30-50 cents on the dollar instead of 5-15 cents, they accept.

You don’t need all creditors to agree. You need majority approval by dollar value. Your largest creditor’s yes vote often carries your entire proposal. The voting mechanics favor debtors seeking legitimate debt relief.

Rejection happens in less than 1% of cases. When it does happen, amendment and resubmission options exist. Most apparent rejections are actually amendment requests. Creditors negotiate better terms. You can accept or decline. Even amended proposals count as successful outcomes.

Ready to stop collection calls and structure affordable debt repayment? Find a Licensed Insolvency Trustee in your area for a free consultation with zero upfront costs.