Avoid bankruptcy with a consumer proposal
Do you want to avoid bankruptcy, but you don't qualify for a debt consolidation loan, and you can't afford a debt management plan through a not-for-profit credit counsellor, and you don't trust those for-profit debt consultants who promise to eliminate your debt for very little cost? Then a consumer proposal is for you, and that's why a consumer proposal is the #1 alternative to bankruptcy in Canada.
Why should I try to avoid bankruptcy?
Filing bankruptcy is a "last resort". If you have no other options, than you may have no choice but to file bankruptcy.
However, there are a number of reasons to try to avoid bankruptcy.
First, bankruptcy is the worst possible rating (an R9) on a credit report, and it remains on your credit report for a minimum of six years, possible longer, after you are discharged. A consumer proposal is an R7, and it remains on your credit report for three years after the proposal is completed. So, a consumer proposal is generally better for your credit rating.
Second, when you file bankruptcy you lose any assets that are not exempt from seizure by the trustee. For example, you can lose your house or valuable car. In a consumer proposal, you keep your assets.
Third, the cost of bankruptcy goes up or down each month based on your income. Your bankruptcy trustee will calculate your surplus income, and the more you earn, the more you pay.
Finally, most people simply don't want to file bankruptcy. They don't want to "run away" from their debts; they want to face the problem and negotiate a reasonable settlement with their creditors, making a consumer proposal a great way to avoid bankruptcy.
