BANKRUPTCY
VS
CONSUMER PROPOSAL
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Differences between Bankruptcy and Consumer Proposal
CONSUMER PROPOSAL
BANKRUPTCY
Who can claim?
$1000 Anyone who is insolvent and owes more than $1,000.
$250K If your debts do not exceed $250,000 (excluding mortgage) and you are able to make monthly payments toward paying off a portion of your debt.
BANKRUPTCY
CONSUMER PROPOSAL Who can file?
Must be filed by a Licenced Insolvency Trustee
Must be filed by a Licenced Insolvency Trustee
CONSUMER PROPOSAL
BANKRUPTCY
What does it cost? Payment are based on income, non-discretionary expences and household size.
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A proposal amount is agreed between you and your creditors. A monthly payment is determined based on your debt and any assets. Administration costs are included in the monthly payment
CONSUMER PROPOSAL
BANKRUPTCY
How long will it last?
Up to 5 years but may be paid off early with no penalty
For first time bankruptcies – a minimum of 9 months 9 MONTHS
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2
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4
5 YEARS
BANKRUPTCY
CONSUMER PROPOSAL
Will I lose my assets?
Certain assets are surrendered depending which province you live in
No assets are surrendered
BANKRUPTCY
CONSUMER PROPOSAL
What about my tax refund?
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Turned over to your creditors
$ $ You are allowed to keep refunds
BANKRUPTCY
CONSUMER PROPOSAL
How will it affect my credit rating?
R7 R9 Your credit rating will show R9 for 7 to 14 years. This is the worst rating
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Your credit rating will show R9 during the period of the proposal, and go to R7 once the proposal has been completed, with all payments made. This indicates you have made a settlement with your creditors
BANKRUPTCY
CONSUMER PROPOSAL
Do I have to report monthly?
You must submit a report that details all income and expenses and include pay stubs and certain receipts.
No monthly reports are required
BANKRUPTCY
CONSUMER PROPOSAL
Will it stop collections and wage garnishment?
Contact from creditors cease upon filing
Contact from creditors cease upon filing
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