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"Having us do a budget each month really worked for us. We now have an ability to balance our monthly income and expenses. "
~Stan - View Royal


"Both my wife and I had to declare bankruptcy. Afterwards, I realized that my parents needed to go bankrupt as well. It was good to have a relationship with a Trustee that I knew would treat my parents with the respect they deserve. "
~Charlie and Candice - Sooke


2014-08-25 16:14:53

Consumer Proposal v. Bankruptcy

There are many options to solve problems with debt in Canada but the main choices are a consumer proposal or personal bankruptcy. While both are options to consider when solving debt problems, there are differences between these two options.

The criterion to be eligible for a consumer proposal is:

  • Owe less than $250,000, which doesn’t include mortgage on primary residence
  • Unable to pay your debts on time (insolvent)
  • Be able to make the consumer proposal payments
  • No unfinished or open consumer proposals

A fixed monthly payment agreed by you and your creditors until proposal is completed and you will not lose any assets. An r7 credit rating will appear on your credit report because of your debt settlement and will remain on your credit report for 3 years. You will still be eligible to receive tax refunds and credits from the government with a consumer proposal.

The criterion for bankruptcy is:

  • Owe more than $1000
  • Cannot pay debts on time (insolvent)
  • The sale of your assets cannot pay off your debts

In bankruptcy, you will be required to make monthly payments based on your income meaning the more money you make; the more you will have to pay. You will also have to surrender certain assets to proceed with the bankruptcy. A R9 credit rating will put on your credit report and will remain on your credit report for 7 to 14 years. You will be required to provide proof of all income or cash received and make a budget every month.  You will not be eligible for tax refunds or credits which will go to your trustee.

For more information about these options, you can always consider a free initial appointment with C.E. Craig and Associates.