Bankruptcy
Important Differences Between a Consumer Proposal and Personal Bankruptcy
| Consumer Proposal | Bankruptcy | |
|---|---|---|
| Cost | Fixed monthly amount for the term of the proposal. Amount based on what you can reasonably afford. | Can vary month to month depending on your income. The more you earn, the more that you pay. |
| Length | Up to 5 years (60 months) | 9 months to 36 months |
| Credit Report Impact | R7 indicates that you are on a debt repayment plan. Reported for 3 years after completion. |
R9 the lowest rating possible. Indicates the debt is written off. Reported for 7 to 14 years. |
| Duties | Make (agreed upon) monthly proposal payments | Required to perform the following: 1) report income each month 2) if trigger surplus income, make additional payments 3) attend 2 counselling sessions 4) provide tax documents (can lose all refunds) |
| Important | Will know up front if creditors will accept proposal offer. 99% of the proposal we file are accepted. | Creditors could oppose discharge at the end. Could result in an increase in cost and/or length of bankruptcy term. |
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