Bankruptcy vs Consumer Proposal

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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$ $

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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

3

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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$ $

$ $

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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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