Once a proposal is filed, any wage garnishments are stopped, and assets cannot be seized.
Consumer Proposals vs Bankruptcy
A proposal is an offer to repay a portion of what you owe, bankruptcy is a legal process to eliminate all debt.
Consumer Proposals
Bankruptcy
Creditor Protection
Creditor Protection
Wage garnishees are stopped,
Certain assets can be seized in a bankruptcy, call us to find out what maybe seizable in your situation.
Additional Income
In a proposal, if the debtor earns or receives income over what was originally described in the proposal, the proposal is not affected.
Additional Income
In bankruptcy if you receive or earn additional income or money then the amount you are required to pay towards the bankruptcy can increase.
Employment
Employment is not affected in consumer proposals
Employment
Bankruptcy can affect employment for some professions, legal professions, banking, anything to do with money. Bankruptcy can affect your ability to be bonded.
If you get a raise at work you can be required to pay more.
Credit Reports
Stays on your credit report for three (3) years.
Credit Reports
When you file for bankruptcy it stays on your credit report for six (6) to seven (7) years.
Approvals
Proposals are prepared by a licensed insolvency trustee and then presented to your creditors for approval.
Approvals
Creditors have no say in a bankruptcy.
Cost
- Set up cost is included in monthly payment
- Costs less than Bankruptcy
- Debts are reduced up to 70%
- You keep your assets.
Cost
- More expensive
- Costs can increase if you earn more
- Tax refunds are forfeited
- Assets are seized
Consumer Proposals
Creditor Protection
Once a consumer proposal is filed, any wage garnishments are stopped, and assets cannot be seized.
Additional Income
In a consumer proposal, if the debtor earns or receives income over what was originally described in the proposal, the proposal is not affected.
Employment
Employment is not affected in consumer proposals
Credit Reports
Stays on your credit report for three (3) years.
Approvals
Consumer proposals are prepared by a licensed insolvency trustee and then presented to your creditors for approval.
Cost
- Set up cost is included in monthly payment
- Costs less than Bankruptcy
- Debts are reduced up to 70%
- You keep your assets.
Bankruptcy
Creditor Protection
Wage garnishees are stopped,
Certain assets can be seized in a bankruptcy, call us to find out what maybe seizable in your situation.
Additional Income
In bankruptcy if you receive or earn additional income or money then the amount you are required to pay towards the bankruptcy can increase.
Employment
Bankruptcy can affect employment for some professions, legal professions, banking, anything to do with money. Bankruptcy can affect your ability to be bonded.
If you get a raise at work you can be required to pay more.
Credit Reports
When you file for bankruptcy it stays on your credit report for six (6) to seven (7) years.
Approvals
Creditors have no say in a bankruptcy.
Cost
- More expensive
- Cost can increase if you earn more
- Tax refunds are forfeited
- Assets are seized
Consumer Proposals vs Bankruptcy
When considering filing for bankruptcy vs a consumer proposal, individual situations are different but consider:
- bankruptcy is more expensive than a consumer proposal
- consumer proposals you keep your property & belongings
- bankrupts lose tax refunds, and any valuable assets.
- bankruptcy is 7 years on credit reports, consumer proposals 3
The payment can be the biggest difference. In a consumer proposal the monthly payment is a set amount spaced over a set period of time.
In bankruptcy the payments are based on your income. The more you earn, payments can increase.
Consumer Proposal or Bankruptcy
Many people with debt issues are first attracted to the concept of going bankrupt, with the option of starting over financially.
Consumer proposals should first be investigated as an alternative to bankruptcy as the debtor does not lose assets.
Consumer proposals may also reduce the long term implications of filing for bankruptcy.
★★★★★ After years of struggling with credit card debts I was deeper and deeper in the hole.
I was able to get out of debt and pay off my outstanding loans to my creditors in 5 years with a consumer proposal and without considering a bankruptcy. Now I’m stress free and the collection calls have stopped, Many thanks! Julie Davies, Oshawa.
Learn more about Consumer Proposals vs Bankruptcy
As insolvency trustees we help people with consumer proposals, debt solutions and filing for bankruptcy.
We’re in the business of helping people get out of debt and we can help you.
Give us a call to learn more about consumer proposals vs bankruptcy. We can go over your options and give you honest advice about what’s best for you.
Take the first step to living debt free, call 905-721-7506 for an appointment today.
