Consumer proposals and bankruptcy both give you legal protection, but the experience is very different.
A consumer proposal lets you keep your assets, protect your income, and usually repay only about 30% of what you owe. Bankruptcy eliminates most debts faster but has stricter rules, more impact on your credit, and may affect your assets.
Understanding these differences helps you make the right choice for your situation.
In a consumer proposal, most people repay around 30% of what they owe — a savings of about 70% compared to paying the full balance. In bankruptcy, most debts are cleared, but the impact on your life is mush stronger.
With a proposal, you keep your home, your car, your RRSPs, and your personal belongings. Bankruptcy may require you to surrender assets depending on your province and equity levels.
A consumer proposal gives you one fixed monthly payment that never increases.
In bankruptcy, your payment can go up if your income rises because of surplus income rules.
A proposal does not change based on income increases. You stay in control. Bankruptcy payments can climb if you earn more, which makes budgeting harder.
A consumer proposal shows as an R7 rating and allows you to rebuild during the process. Bankruptcy is an R9 — the lowest rating — and stays on your report longer.
A proposal lasts three to five years, but you can pay it off early at any time. Bankruptcy is faster (nine to 21 months), but carries more consequences.
Both options stop:
In a proposal you keep your property, vs in a bankruptcy some property will have to be surrendered.
A consumer proposal is often the better choice when you:
Bankruptcy may be the better option when:
Some people a bankruptcy maybe a better option, but you need to sit down and figure out which. Our trustees are here to guide you through the process do ensure your best interests in your insolvency are provided for.
All unsecured debts, credit cards and unsecured loans can be applied to a consumer proposal, getting you completely debt free in 5 years or less!
| Feature | Consumer Proposal | Bankruptcy |
|---|---|---|
| Debt Repaid | Usually repay ~30% of what you owe (about 70% savings). | Most debts eliminated, but with stronger consequences. |
| Assets | You keep your home, car, RRSPs, and belongings. | Some assets may be taken depending on equity rules. |
| Monthly Payments | One fixed payment that never increases. | Payments can increase if income rises (surplus rules). |
| Interest | Interest stops immediately. | Interest also stops, but conditions differ. |
| Impact on Credit | R7 rating. Can rebuild during the proposal. | R9 rating. Strongest impact, lasts longer. |
| Length | 3–5 years, with early payoff allowed. | 9–21 months for first-time bankruptcy. |
| Income Effect | Income increases do NOT raise payments. | Higher income = higher payments. |
| Legal Protection | Stops collections, garnishments, and lawsuits. | Also stops collections, but with stricter rules. |
| Stigma / Impact | Less impact, keeps your stability. | Greater stigma and more disruption. |
This consumer proposal calculator shows an approximate of how much you could save.
If you’re feeling overwhelmed by debt and not sure where to start, the best thing you can do is talk to someone who understands.
Call now and speak directly with me — Kelly Dey — for clear, honest advice that’s tailored to your situation. There’s no pressure and no judgment. We’ll look at your options together and create a plan that helps you breathe again. Getting started is easier than you think, and one simple conversation can put you back in control of your money and your life.
Let’s take that first step today, call 905-721-7506.
A. Because most proposals settle the debt for roughly 30% of the balance. The exact amount depends on income and debt level, but many people see large savings.
A. Sometimes, but not always. Bankruptcy may be cheaper month to month, but the long-term impact on assets, credit, and income can be much higher. We’d be happy to discuss it further if your thinking about it.
Give us a call at 905-721-7506 and one of our trustees can answer any more detailed questions.
A. Yes. Many people start bankruptcy and then file a proposal to protect assets and gain more control over payments.
Insolvency Trustee – Kelly Dey
If you’re feeling weighed down by money or debt issues, give me a call at 905-721-7506 and lets just have conversation.
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Samantha J.
3 days ago
★★★★★ I thought I had to file bankruptcy, but the proposal made more sense. I kept everything and ended up paying only about a third of what I owed. Huge relief.
Tyler Grant
1 week ago
★★★★★ They showed me the difference clearly. Bankruptcy would have affected my assets, but the proposal protected them and cut my debt by around 70%.
Angela Morris
2 weeks ago
★★★★★ The comparison helped me choose. Bankruptcy was faster, but the proposal let me keep my savings and gave me a low monthly payment I could handle.
James D.
3 weeks ago
★★★★★ Once I understood both options, the proposal was the clear winner. I saved thousands and avoided the strict rules that come with bankruptcy.
Linda P.
1 month ago
★★★★★ The proposal was worth it for me. My payment stayed the same, I kept my car, and I paid back far less than the total amount I owed.
Rise Above Your Debt!
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