Consumer Proposal vs. Bankruptcy

people discussing david sklar debt relief consumer proposal vs bankruptcy comparison

What are my debt relief options?

Like filing a consumer proposal, declaring personal bankruptcy will help you to clear your debts and protect you from creditors. Understanding the pros and cons of a Consumer Proposal vs. Personal Bankruptcy will help you make the right decisions.

Differences to be aware of:

If you have more questions about consumer proposal vs personal bankruptcy, we are just a phone call away.

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Consumer Proposal vs. Bankruptcy

We help folks from all walks of life and we can help you, too. 

We are a team of Licensed Insolvency Trustees (LIT) which means we can help you out of whatever financial difficulty you’ve found yourself in and we’ll do so with compassion.

Take a moment to learn the difference between a Consumer Proposal and a Bankruptcy and make a decision your future self will thank you for.

Book your free consultation today.

Consumer Proposal vs. Bankruptcy

Filing a consumer proposal or declaring personal bankruptcy will help you to clear your debts and protect you from creditors but there are some important differences to be aware of. 

One major advantage of a consumer proposal is that you will not lose any of your assets and you are not required to surrender anything.

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Consumer Proposal

Bankruptcy

Total debt must be less than $250,000

No limit to size of debt

Only available to individuals

Available to individuals or companies

You keep your Assets: Home, Car, RRSP’s, RESP’s, & Investments

Surrender your assets (Exemptions)

Keep Your Tax refund

Calendar year’s tax refunds go to creditors

Payments are structured based on what you can afford

Payments based on household income and value of assets

The payment is flexible you can pay everything immediately (lump sum), or stretch your payments over a maximum of 5 years the choice is yours

The payment is NOT flexible, first bankruptcy 9-21 months, second-time bankruptcy 24-36 months

Consolidation loans vs. consumer proposals and bankruptcy

Lenders often market high-interest debt consolidation loans as easy money. However, what they don’t tell you is that this “easy money” is hard to pay back and can result in a debt spiral that is even harder to get out of. 

Many people perceive high-interest debt consolidation loans as a quick, cheaper alternative to government-regulated, debt relief programs like consumer proposals or bankruptcy. In reality, these loans end up costing people far more than what they currently owe.

While the concept of getting a high-interest consolidation loan to pay off debt quickly may seem like a good idea, it’s a short-term band-aid solution with long-term adverse effects. There is a lot that lenders won’t tell you.

Avoid high-interest lenders

If you find yourself in a difficult financial situation and you have poor credit, finding a low-interest loan may be difficult. For many of our customers, turning to a subprime or high-interest lender is the only way they can
access the funds they need. The Canadian Government has laws in place that prohibit lenders from charging interest rates that exceed 60%.
*However Payday loans are exempt from the 60% interest rate limitation, the annual interest rate on a Payday loan is close to 400% or higher if you miss payments.

Examples of non-bank loans, with high-interest rates:

Cash Advance

Payday loans*

High-Interest Term Loans

High-Interest Lines of Credit

Car title loans

Rent-to-own products

Debt Risk Level

The cost of using high-interest loans at 30%

Loan AmountInterest RateMonthly PaymentTotal Cost
(Over 5 years)
Total Interest
(Over 5 years)
$20,00030%$647.07$38,824$18,824
$30,00030%$970.60$58,236$28,236
$40,00030%$1,294.14$77,648$37,648

*Interest rates can fluctuate based on the lender.

Getting into debt is easy. Getting out is a different story.

But it's still possible!

Did you know there is a Canadian debt relief program federally regulated by the Canadian Government, designed to help citizens avoid claiming bankruptcy? This amazing program can only be administered by a Licensed Insolvency Trustee (LIT).

If you’re struggling to make your payments every month and creditors won’t stop calling, we can help.

What our clients are saying.

Based on 765 reviews
The team at David Sklar and Associates Inc are very professional and are willing to help you get out of debt. Highly recommended.
12:35 03/29/23
I would like to thank the team at David Sklar and associates inc. for all the time and effort they put in to support this process for me. This topic can be challenging to disclose but a big thank you to Christine for going above and beyond in guiding me through all my options and supporting me through the decisions. I cannot recommend this group enough , as they have shown me compassion , knowledge , and understanding throughout the entire process. I look forward to the next step of this process and learning how the proper way of becoming financially educated through the support of their financial counselling team. For anyone who is struggling , just know that there is a wonderful group of educated professionals at David Sklar who are available to help!
18:45 03/14/23
It took me awhile to get up the courage to contact David Sklar but I’m so glad I did. Trina walked through my options with me and provided the knowledge I needed to make a decision to help turn my financial situation around. She is patient and empathetic and answered any and every question that I had. Trina provided me the reassurance I needed that I was making the best decisions for me and my family. I’m so happy that I reached out and now have a plan to get back on track.
19:59 03/12/23
Trina was very helpful and thorough.
15:26 03/12/23
Christine was very helpful, kind, and understanding. She explained everything thoroughly, answered any questions I had, and was responsive to any concerns I had. 100% would recommend
17:29 03/08/23
Jackie Stanley is excellent she took the time to explain everything to me and I am so grateful to her for giving me a fresh financial start so if you have any doubts don’t and go see her if you want to achieve financial freedom!
21:24 03/06/23
Amazing friendly staff that knows what they are going. They make a difficult situation not so bad. Would give 10 stars if I could.
22:37 02/25/23
Very helpful and kind and gave me all the available options before helping me decide which one was best for me. I would definitely recommend Jackie
01:01 02/21/23
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We are David Sklar

Our team of Licensed Insolvency Trustees in Ontario can help you get out of debt and in control of your own financial future. We’ve helped thousands of people and we can help you too. 

We know this is stressful, but you're not alone.

It’s going to be okay.
Book your free consultation today. We’ll do the rest.