Can you switch a consumer proposal to a bankruptcy?

May 28th, 2014 by Questions

Can you switch a consumer proposal to a bankruptcy? If I am in a consumer proposal and I feel I need to declare bankruptcy can I have the consumer proposal nullified and declare bankruptcy? At this point I am in neither one, I’m just wondering.

thank you

Posted from: Ontario

Questions

One Response to “Can you switch a consumer proposal to a bankruptcy?”


May 28, 2014 at 5:57 pm, Jillian Taylor-Mancusi, Trustee | B.A. | C.I.R.P said:

If you default on a consumer proposal you are not automatically bankrupt. This simply means that you cannot file another consumer proposal on the same debts. You can file an Assignment in Bankruptcy which constitutes default in the consumer proposal. This can happen where debtors are overly optimistic about completing the consumer proposal or where their circumstances change such that making the payments under the proposal are too onerous.

Since you have not yet filed a consumer proposal or a bankruptcy you should consider sitting down with a trustee in your area for a consultation. The trustee can look at your debts, your income etc. and together you can discuss a possible proposal. Once you know what the possible payments in a proposal would be, you can then compare those figures to your budget and see if the proposal would be a viable solution to your debt situation or perhaps bankruptcy may be better suited to your monthly budget and cash flow.

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