A proposal is a deal we negotiate with your creditors. For example, if you owe $50,000 on five different credit cards and bank loans, we could offer a proposal where you pay, say, $300 per month for the next four years. That money is then divided amongst your creditors, and if they accept it, you can avoid filing bankruptcy.
A big advantage of a consumer proposal are that once the proposal is accepted you know exactly what you must pay each month, so you no longer have to juggle between all of your debts. Another advantage is that you are not required to sell your house, or lose your RRSP or other assets.
In a bankruptcy, the amount of money you must pay each month that you are bankrupt will increase as your income increases, so bankruptcy can be expensive if your income increases. It is also possible that you will lose your house or other assets in a bankruptcy.
So which option is better? It depends. If you own a house in Cambridge that has significantly increased in value, a proposal may be the best option to deal with your debts and keep your house. If you expect your income to increase, a proposal may also be your best option.
However, if you don't own any assets, and if you expect your income to remain stable or decrease, a bankruptcy may be the correct option.
Feel free to call my office in Cambridge at 519-622-3773 and my staff will set up a meeting so that I can personally review your situation, and determine which option is best for you and your family.
posted by J. Douglas Hoyes, CA, Trustee @ 2:06 PM
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