Consumer Proposal and Personal Bankruptcy – What are they and what’s the difference?
A Brief Overview of Our Services
When you meet with us at one of our offices in Toronto, Mississauga, Brampton, Scarborough or Don Mills, one of the following options will be available to you, depending on the severity of your problem:
A consumer proposal is simply a settlement with your creditors. With the assistance of a Licensed Insolvency Trustee, you are making a monthly payment towards repaying some of your debts. The trustee designs a payment plan that you can afford and that your creditors will accept.
A successful consumer proposal will allow you to avoid bankruptcy and minimize the effect on your credit rating. When you file a consumer proposal, your creditors will be stopped from taking most legal steps to recover their debts from you; for example, imposing wage garnishees. We will contact your creditors directly.
Filing for personal bankruptcy is something to consider if you are unable to solve your problems with a consumer proposal. For example, your income may be too low and/or or your debts may be too high to file consumer proposal that would be acceptable to your creditors.
Filing for personal bankruptcy is a legal process, regulated by the Bankruptcy and Insolvency Act, by which you may be relieved of most, or all, of your debts. When you declare personal bankruptcy, your creditors will be stopped from taking most legal steps to recover their debts from you. We will contact your creditors directly.
The two most common questions people ask about personal bankruptcy are:
1. Will I lose my assets?
In the majority of situations, you won’t lose your assets, as Ontario law allows a bankrupt person to retain:
- Household furnishings and appliances up to $13,150
- your principal residence is exempt from seizure IF the equity in your home does not exceed $10,000. If the equity does exceed $10,000 then your principal residence is subject to seizure and sale
- All necessary clothing
- Tools of the trade up to $11,300
- A vehicle valued up to $6,600
- Other special exemptions for farmers
- Certain life insurance policies and certain RRSPs
Other assets you have may be sold by the trustee for the benefit of your creditors; however, this will be discussed in greater detail in your initial free consultation with one of our professionals. Arrangements can also be made to allow you to keep assets that would normally be sold.
2. What happens to the income I earn during my bankruptcy?
You may be required to make a payment of a portion of your income during the bankruptcy period. As each individual’s situation is different, we will advise you prior to the bankruptcy of any payment required and what the likely time period will be.
As compassionate professionals who want to help solve your financial problems, we will explain your options to you in detail and help you make decisions that are right for you. Our representatives will help you develop a creative, workable solution that will see you through your time of financial difficulty so that you can have the fresh start that you deserve.
Want to work with us? Our promise to you…
- You will be in constant contact with a real Licensed Insolvency Trustee.
- Your calls will always be returned.
- Your emails will never be ignored.
- We will work with you to craft an affordable payment plan that makes sense for your budget.