Consumer Proposal vs Personal Bankruptcy


Canadian Personal Bankruptcy vs Consumer Proposal: What’s the difference? Which one is right for you?

If you’re struggling with paying off debt, are frequently receiving notices from creditors, and having your wages garnished, declaring personal bankruptcy or filing a consumer proposal may be a helpful solution. Unfortunately, people can often have difficulty deciding which option is right for them. They are similar in some ways: both consumer proposals and personal bankruptcies offer you some legal protection from your creditors.  Letters and phone calls from creditors, wage garnishment, and interest on your debt will all cease. You will need the help of a Licensed Insolvency Trustee to implement either one. But they do have some differences as well.

-Consumer Proposals can only be filed if your total debt, other than mortgage, is less than $250,000.

-Personal Bankruptcy requires you to submit a monthly statement of income to your Trustee. This includes all paystubs and spending for that month.

-Your Trustee may require you to surrender some of your assets during a personal bankruptcy, in order to pay off creditors. This is not the case with consumer proposals.

-Personal Bankruptcy usually takes around 9 months to pay off all of your debt; however, they can sometimes take up to two years. Conversely, consumer proposals take between three and five years to pay off your debt.



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Canadian Consumer Proposal vs Personal Bankruptcy