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What is the difference between a consumer proposal and bankruptcy?
In Canada, filing for bankruptcy or a consumer proposal must be done through a bankruptcy trustee. In bankruptcy, all your non-exempt, unsecured debts are discharged at the end of the bankruptcy and a notification stays on your credit score file for at least seven years.
A consumer proposal involves making an offer to pay back a percentage of your unsecured debts either as a lump sum or through agreed monthly payments (you must complete these payments within five years). A consumer proposal stays on your credit score for only three years after completion of the agreed upon payment plan.
