| Consumer Proposal | Bankruptcy | |
| Length of Repayment | Repayment usually takes place over 60 months (5 years) You can pay a Consumer Proposal as fast as you wish. | Repayment can take place over a period of 9 months and up to 21 months if it is your first bankruptcy If it is not your first bankruptcy, repayment takes place over a period of 21 months up to 36 months You cannot pay off a bankruptcy faster, meaning you are restricted to payments within the time limit allocated. |
| Effect on Credit Score | Stays on your credit report for the length of your repayment, and then an additional 3 years after you have completed your repayment. Most Consumer Proposals stay on a credit report for 8 years (5 years repayment + an additional 3 years). | If it is your first bankruptcy, it will stay on your credit report for 6 years after you have finished your repayment. If it is not your first bankruptcy, it will stay on your credit report for 14 years after you have finished your repayment |
| Signing Documents | Signing your Consumer Proposal documents grants you legal stay immediately, meaning your creditors cannot pursue you in any way or engage in collection activity any longer. There is a 45 day waiting period for your Consumer Proposal to be accepted. During this period, your creditors can either accept the terms you have proposed, or counter offer a higher repayment Once a Consumer Proposal has been accepted, nothing can change the agreed upon terms. | Signing your bankruptcy documents grants you legal stay immediately, meaning your creditors cannot pursue you in any way or engage in collection activity any longer. A bankruptcy is deemed accepted immediately, meaning there is no 45 day waiting period. Terms change depending on your finances. You must provide your trustee with a monthly budget and documentation each month for your income. The trustee will calculate your repayment monthly, which will be based on the information provided in the documents stated above. Any fund you receive during your bankruptcy will go towards your bankruptcy until you are discharged (ex. Income tax returns, inheritance, money from any sold assets, any extra income, etc.) |
Bankruptcy versus Consumer Proposal
There is no way to know what would be most beneficial for your unique situation as it varies from case to case, but most times a consumer proposal is the most favorable option.
Please contact us today to find out what would be best for your unique situation. We have specialized advisors who can help to assess your situation and get you on the best path to debt freedom! Call us today to find out how you can become debt free!