Often explored when a manageable payment is possible
- You want to keep your assets
- You can afford a consistent monthly payment
- You want to avoid bankruptcy where possible
- You need debt reduction, not only lower interest
Compare two formal debt solutions
Consumer Proposal vs. Bankruptcy
Both options are formal insolvency processes administered by a Licensed Insolvency Trustee, but they differ in payments, asset treatment, duration, and long-term impact.
Side-by-side
Key Differences
| Consideration | Consumer Proposal | Bankruptcy |
|---|---|---|
| Basic structure | Offer creditors an agreed repayment amount over time. | Formal insolvency process that may discharge many unsecured debts. |
| Monthly payments | Usually fixed once the proposal is accepted. | May vary based on income and applicable rules. |
| Assets | Assets are generally retained if proposal terms are followed and secured payments remain current. | Some non-exempt assets may need to be surrendered or accounted for. |
| Creditor approval | Creditors have a formal opportunity to accept or reject the proposal. | Creditor approval is not required to file. |
| Interest and collections | Interest on included debt generally stops, and most collection action is stayed after filing. | Interest on included debt generally stops, and most collection action is stayed after filing. |
| Maximum length | May run for up to five years. | Length depends on circumstances, income, and whether it is a first or later bankruptcy. |
| Credit impact | Reported to the credit bureaus. | Reported to the credit bureaus. |
This comparison is general information only. A Licensed Insolvency Trustee must review your finances and explain how the law applies to your situation.
Which may fit?
Situations People Commonly Discuss With a Trustee
Often explored when repayment is no longer realistic
- Your unsecured debt is severely unmanageable
- No affordable proposal payment is available
- Collection pressure is creating serious hardship
- You need a formal financial reset
Important
The Better Option Depends on Your Full Financial Picture
Income, assets, household size, secured debts, tax debt, prior insolvencies, and payment capacity can all affect the answer.
Start the Assessment- Do not choose based only on the lowest monthly payment
- Ask how assets and income will be treated
- Understand the credit consequences
- Compare total cost and completion requirements
- Confirm all advice with a Licensed Insolvency Trustee
Common questions
Comparison FAQs
Can both options stop collection calls?
Filing either process generally creates a stay that stops most collection action involving debts included in the filing, subject to legal exceptions.
Can I keep my home in a consumer proposal?
Often, provided mortgage payments remain current and the proposal appropriately accounts for your financial circumstances.
Is bankruptcy always cheaper?
Not necessarily. The cost depends on income, assets, duties, and individual circumstances.
Who decides which option I should use?
A Licensed Insolvency Trustee reviews your finances and explains the available legal options. The final decision remains yours.
Clarity today, confidence tomorrow.
Compare Your Options With Real Numbers
Complete our confidential assessment and take the next step.