Personal bankruptcy and a Consumer Proposal are the two most common financial restructuring plans available in Canada. When comparing the two, it’s important to select the option that gives you greatest financial benefit to eliminate your debt.
Although both options provide immediate protection from our unsecured creditors, each offers varying benefits and the best option will depend on your current financial situation.
The following illustration provides an overview of the main differences between a personal bankruptcy and a consumer proposal.
|Do I receive immediate protection from my unsecured creditors?||YES||YES|
|Is acceptance required from my unsecured creditors and the Court?||NO||YES|
|Is there any limitation on the amount I owe to qualify?||NO||YES|
|Is a meeting of creditors mandatory?||NO||NO|
|Is it possible that my monthly payments may increase or decrease?||YES||NO|
|Can I prepay to complete the process quicker?||NO||YES|
|Is it possible to defer my monthly payments and extend the process?||YES||YES|
|Do I have to attend financial counseling sessions?||YES||YES|
|Do I have to submit monthly income and expense statements?||YES||NO|
|Will I lose my income tax refund(s)?||YES||NO|
|Will I lose my GST refunds?||NO||NO|
|Is it possible that I may lose some of my assets or property?||YES||NO|
|Will my credit rating be affected?||YES||YES|
|Can I be a director of a limited corporation?||NO||YES|
Thanks for making me feel so comfortable.Karen B.