CONSUMER PROPOSAL NOW BANKRUPTCY
My Husband and I filed for a consumer proposal under the advice of a trustee.
Our debts were personal and debts from a failed business (which was the direct cause of our insolvency) We have just paid our first payment and we feel that perhaps we should have gone the bankruptcy route …could we have chosen to go bankrupt over consumer proposal. From what I have read it is more expensive to go the consumer proposal route.
You defiantly could have filed a bankruptcy over a consumer proposal, the decision is yours to make. However, just because a proposal is a cheaper route doesn’t mean it was not the better of route to select. There are many potential advantages of a proposal, all of which are completely dependant on specific aspects of your situation. Some of the more common advantages are as follows:
1. Less severe impact on credit than a bankruptcy;
2. Is less of stigma associated with a proposal than an bankruptcy which can often allow one to rebuild their credit quicker once the proposal is finished;
3. Greater certainty exists with a proposal as once it has been approved by the creditors and the court the payment is set. Whereas in a bankruptcy, if your income fluctuates so can the cost of the bankruptcy.
4. Often a proposal can allow you to arrange to keep non-exempt assets (such as RRSP’s luxury goods etc.) that would have been lost if a bankruptcy were filed.
As you can see, the best option sometimes is not the cheapest option. I always advise everyone that bankruptcy should be used as a last resort, if you have the ability to avoid it, do.