Consumer Proposal & Bankruptcy Toronto, Ontario

How To File Bankruptcy In Toronto

Your first step is to contact a Licensed Insolvency Trustee (LIT). Under Canadian Law, a LIT is the only professional who can file your bankruptcy documents. LITs are specifically trained to find insolvency solutions in the best interests of the debtor and the creditors.

When you meet with a LIT, the information you gather will help you rest more straightforward as you see the road ahead. Depending on your situation, the LIT may describe other insolvency solutions as alternatives to bankruptcy. Your first meeting with a LIT is free and confidential, and you are under no obligation.

As described, the process starts with your first meeting. If you decide to file bankruptcy, you will provide your financial records (pay statements, credit bills, monthly expenses, etc.) to the LIT, who will prepare the paperwork.

The LIT will discuss your bankruptcy obligations with you, including submitting a monthly statement of income and expenses and attending credit counselling sessions. You will learn how long your bankruptcy will likely last and which assets or property will be “seized” (which sounds violent but is simply an old legal term). You will learn how the property or assets will be collected.

Once the paperwork is ready, you and the LIT will sign it, and the LIT will submit it to the Office of the Superintendent of Bankruptcy Canada, officially starting the process. At this point, your creditors will no longer be allowed to contact you directly.

When the term of your bankruptcy is up, if you have completed your obligations and other factors are met, you will receive an absolute discharge from your bankruptcy. When this document is issued, you are officially freed from the debts your bankruptcy covers.

Consumer Proposal Toronto

The Advantages & Disadvantages of Filing a Consumer Proposal in Toronto

Should you file for bankruptcy in Toronto? Or is filing a consumer proposal a better idea? Owing to the several benefits offered by consumer proposals, an increasing number of people are choosing to file consumer proposals instead of filing for bankruptcy. However, it’s best to carefully consider all the pros and cons of filing for bankruptcy vis-à-vis consumer proposals and preferably seek counsel from a licensed insolvency/bankruptcy trustee in Toronto before deciding.

Is Filing a Consumer Proposal the Right Solution for you?

To help you make an informed choice, here’s a guide to the advantages and disadvantages of filing a consumer proposal:

Advantages of Consumer Proposals

For those who qualify for a consumer proposal, it’s a great alternative to other debt-relief options because Canada’s only government-approved debt settlement program provides debt relief without filing for bankruptcy. It allows you to repay only a portion of your debts, keep your assets, stops interest when you file, and has affordable monthly payments.

Disadvantages of Consumer Proposals

A consumer proposal is a public record that may not be as fast as expected. It usually takes longer to complete than a bankruptcy, and worse, your creditor may not accept your proposal. 

Therefore, a consumer proposal filing is not for everyone. If you do not possess any assets that could be seized in bankruptcy, filing for a consumer proposal may not be your ideal solution. So, it’s essential to assess your situation by a bankruptcy trustee in Toronto before you arrive at a decision.