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Difference between consumer proposal and bankruptcy
This short video explains the difference between a consumer proposal and bankruptcy. A consumer proposal is a deal to end your debts. A consumer proposal is a legally binding process that is administered by a licensed trustee.
5 things that make the difference between consumer proposal and bankruptcy
- In a bankruptcy, if your income goes up, the amount you have to pay to your Trustee may very well go up. In a consumer proposal, your payment is fixed.
- In a bankruptcy, you will lose your income tax refund, contributions to your RRSP in the last 12 months, RESP for your children and other assets. In a consumer proposal that is accepted by your creditors, you get to keep your assets.
- There is less reporting in a consumer proposal. You do not have to show proof of your income every month as long as you are keeping your consumer proposal payments current.
- In a bankruptcy, if there is opposition to your discharge from bankruptcy, then you must attend for a Court hearing.There is no Court process at the end of the administration or a discharge hearing in a consumer proposal.
- You stay in control of your assets and affairs in a consumer proposal that is accepted by your creditors and that you are performing.
These are the main things that create a difference between consumer proposal and bankruptcy.
If you have too much debt, call us now!
We offer personal bankruptcy and consumer proposal services, as well as corporate restructuring and corporate receivership and bankruptcy services to residents of the Greater Toronto Area. We explain the differences between a consumer proposal vs. personal bankruptcy. In most cases we can get a consumer proposal done and it usually results in a substantial reduction in the amount you have to repay. The amount you are required to pay when you file a consumer proposal depends on a number of factors as explained in this short video.
So now that you know the 5 major items that makes up the difference between consumer proposal and bankruptcy and if you are experiencing financial problems, or you know that you are insolvent and are considering a consumer proposal vs. personal bankruptcy, or looking at all of your realistic options, including all alternatives to bankruptcy, contact Ira Smith Trustee & Receiver Inc. Ira Smith Trustee & Receiver Inc. is a Vaughan (Toronto) bankruptcy trustee and consumer proposal administrator. We offer sound advice, a free consultation and a solid plan for Starting Over, Starting Now so that you’ll be well on your way to a debt free life in no time.
