Are you wondering what the best solution is to resolve your debt problems? Personal bankruptcy and consumer proposal are the top two debt management options available in Ontario. While both will resolve your debts and provide legal protection from creditors, there are differences between them. Find out exactly what these differences are.

TopicsConsumer ProposalPersonal Bankruptcy
Who can claimYour total debt cannot exceed a $250,000 (excluding a mortgage) and must have the ability to repay a portion of your debts. However, you are not guaranteed to be granted a proposal just by filing one. It must be accepted by your creditors.Any person, who owes more than $1,000 in debt and is insolvent, is eligible to file a personal bankruptcy in Canada. Ideal candidates are those who need rapid financial relief.
CostsOnce you and your creditors agree to a proposal amount, a monthly payment is fixed and it will remain the same until your proposal is completed.Monthly payments vary as they are based on your income. The more you earn, the more you will be required to pay.
AssetsYou will not lose any assets and you are not required to surrender anything.In order to be absolved of your debts you are required to surrender certain assets.
Credit ratingAn R7 credit rating will appear on your report to indicate that you have made a settlement with your creditors. It will remain until 3 years after you complete your payments.You will receive an R9 credit rating, which is the worst rating you can have. Depending on your circumstances, it will remain on your credit report for 7 to 14 years.
Monthly reportYou have no monthly tasks or reporting.You are required to complete a monthly budget for all income and expenses, as well as supply copies of your pay stubs to your trustee.
TaxesYou are still entitled to all tax refund(s) and/or credits which you are owed.You will lose all tax refund(s) and/or credits which you are owed.

While consumer proposals and bankruptcy are the top debt management options in Ontario, they are not your only options. You can also resolve your debts with:

To help you choose which option is best suited for your individual circumstances, simply call us at 1-866-747-0660 or email us at Hoyes Michalos & Associates today. Our experts can help you get relief from your overwhelming debts; all you have to do is ask.

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