Bankruptcy vs. Consumer Proposal
Are you wondering what the difference might be between Bankruptcy vs. a Consumer Proposal? Here are some major difference between the two:
What is it?
A consumer proposal is an agreement between you and your creditors agreeing to pay back a portion of your debt.
Your assets are protected.
Low monthly payments (locked in at whatever amount was agreed upon by your creditors).
A consumer proposal will remain on your credit report for 3 years after completing your payments, or 6 years from the date you filed.
Your monthly payments will remain the same even if your income increases.
You will continue to receive your tax refunds or credits.
Once a consumer proposal is accepted by your creditors they cannot charge interest.
What is it?
Bankruptcy is a legal process that relieves you of your debts.
A licensed insolvency will take control of your assets (with limited exceptions) to help repay your debts.
Payments vary depending on your income.
Bankruptcies appear on your credit report for 7 – 14 years (depending on the circumstances)
If your income increases during your bankruptcy, your payments may increase.
You will lose all tax refunds or credits owed to you.
Even after filing for bankruptcy, you creditors can still charge interest.