A significant difference between a consumer proposal and a bankruptcy is that in a consumer proposal your payment is fixed. In a bankruptcy, this is not the case. In today’s blog post, I will explain why there is this difference.
In a bankruptcy you are required to provide monthly statements which disclose your monthly income and expenses. A trustee uses these statements to calculate how much surplus will have to be paid to complete the bankruptcy. Because these statements are collected after the person files, you cannot determine if there will be a surplus payment required or how much the payment will be, until after the administration of the bankruptcy has commenced.
In a consumer proposal your payment is fixed. You can offer the creditors $12,000 ($200 per month over 60 months). The amount to be paid is a fixed amount once the proposal is accepted by the majority of your creditors. If you receive a pay increase, you are not required to pay any more. A proposal gives people peace of mind, because they know what they will have to pay every month and can budget accordingly.
If you would like more information about a consumer proposal, contact a consumer proposal administrator in your area.