The role acceptance rate plays in your insolvency journey

When you’re exploring debt relief options, acceptance rate may be a term you gloss over in your research, but it shouldn’t be.

A Licensed Insolvency Trustee’s acceptance rate is the percentage of insolvency filings that creditors approve. For example, if a trustee has a 75% acceptance rate it means that 75% of the consumer proposals they submit are accepted by creditors.

When you start working with a trustee, they’ll put together a debt relief plan for you which will outline the monthly payments you’ll make to creditors to pay back a reduced portion of your debt. The majority of your creditors must accept the proposal in order for you to start the insolvency process.

So why should acceptance rate matter to you? If the proposal offer is denied by your creditors, interest and fees may start to accumulate again on your debts from the original due date. If a revised offer is accepted, interest and penalties remain frozen.

If a trustee has a low acceptance rate, it can cause delays in your debt relief journey.

• A rejected offer means that in order to proceed a new offer will need to be created and offered to your creditors.
• Resubmitting an offer may add to the total cost of your proposal.
• You may be required to consider other debt-relief options i.e. bankruptcy in order for your creditors to accept your insolvency.

On the other hand, a high acceptance rate means

• Your trustee is experienced and understands how to balance what you can afford and what your creditors will accept. At Bromwich+Smith, we have a 99% acceptance rate.
• Quick creditor approval means that you can move forward with your filing quickly.
• Peace of mind and reduced stress knowing that you can proceed.

What can impact a trustee’s acceptance rate?

1. Creditor relationships: Trustees who understand your creditors will likely know what they’re willing to accept. A trustee with a good reputation amongst creditors will likely have a higher acceptance rate.
2. Your financial health: Things like your income, debt levels, and financial situation can also influence acceptance rates. A good LIT will assess your situation and ensure the proposal is one you can afford.
3. Unrealistic proposals: A trustee with low acceptance rates may offer proposals that are lower in value than what creditors typically approve.

What questions should you ask to ensure you’re working with a trustee who aligns with your goals and is able to help get your proposal accepted?

1. What is your consumer proposal acceptance rate?
   • Any trustee should be able to answer this question, for example at Bromwich+Smith we have a 99% acceptance rate.
2. What is my backup plan if my proposal is rejected?
   • While the hope is for your offer to be accepted, having a clear plan for handling rejections will help your trustee put together a new option and avoid delays if the offer is not accepted.
3. What experience do you have with cases like mine?
   • An experienced trustee who has handled cases like yours is more likely to achieve a positive outcome.
4. Are there additional costs if the proposal needs to be revised?
   • Clarifying costs upfront can help you avoid a surprise later.

Encountering unfamiliar terms during the insolvency process can feel overwhelming. When in doubt, don’t hesitate to ask questions and do your research. Understanding words like acceptance rate can give you the confidence to move forward with the best Licensed Insolvency Trustee for you.

If you are looking for debt relief options, speaking to a Licensed Insolvency Trustee should be a top priority. If you are ready to talk to a trustee, make sure that it’s one with a proven track record – one that you can trust. Call Bromwich+Smith for an honest conversation about your options.