4 Pillars Discusses Key Differences Between Bankruptcy and Consumer Proposal

You may feel like bankruptcy is your only option if you’re drowning in debt, but other solutions are available in Canada. When you book an appointment with 4 Pillars debt consultants in Victoria, we will discuss the differences between your options and help you make the best decision for you. The following will help you understand the key differences between bankruptcy and consumer proposal.

Assets

One of the most significant concerns individuals have is how debt solutions will impact their current assets. When you file for bankruptcy, you will clear your debts, but there is a possibility some of your assets may be seized to pay your creditors. A consumer proposal, on the other hand, simply deals with your unsecured debts, protecting your assets like your home, car, and bank accounts. Our debt consultants in Victoria will help you learn more about what you can expect from each program.

How Long Does It Last?

Another question our 4 Pillars debt consultants often receive is how long each debt relief method will stay on the individual’s credit. When you file for bankruptcy, you can expect it to affect your credit score for six to seven years for a first bankruptcy. A subsequent bankruptcy will remain longer. If you choose a consumer proposal, it will impact your credit score three years after you complete payments or six years total, whichever comes first. The faster you pay off your consumer proposal, the faster it will disappear from your credit report.

How They Work

Bankruptcy and consumer proposals work differently, requiring you to understand which one will best suit your needs. If you file for bankruptcy, your debts are cleared with no payments required. However, as mentioned, your assets may be seized to pay your creditors. A consumer proposal, on the other hand, creates an affordable repayment plan that pays off a portion of your debt. Once the plan is complete, the remainder of your debt is cleared.

If you’re considering bankruptcy or a consumer proposal, contact us to schedule an appointment with our 4 Pillars debt consultants to discuss your options.