There are a number of major differences between a consumer proposal and a division 1 proposal. When you file a division 1 proposal there is a mandatory meeting of creditors, whereas when you file a consumer proposal a meeting of creditors is not mandatory and is only required if 25% of the creditors request a meeting. The voting requirements are also different. For a division 1 proposal to be accepted by creditors you require 66 2/3% of the creditors by dollar value plus the majority in number to vote in favour of the proposal whereas with a consumer proposal you only require a 51% majority by dollar value of creditors to approve your proposal. If your division 1 proposal is not accepted by creditors or annulled due to non-payment you are automatically bankrupt. With a consumer proposal there is no automatic bankruptcy if creditors reject your proposal or your proposal is annulled.
-Chris Welker
