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 Debt 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 774 reviews
Jerry was professional and was easy to deal with
00:09 11/29/22
I was quite nervous and a little embarrassed that I needed financial advice. I met with Jerry Janiec and he was very helpful. He made me feel comfortable and explained everything in easy to understand terms so that I understood what my options were. I would recommend David Sklar & Associates for anyone in my position.
19:53 11/17/22
I was fortunate enough to be referred to David Sklar & Associates Inc. by a family member. Now in the10th month of a Consumer Proposal process, I am very impressed with the organization, professionalism and impeccable customer representation that I have experienced. To this effect, I amparticularly thankful to Jerry Janiec and Rhoda Lewis for their excellent work.
12:21 11/16/22
Recently dealt with Christine at David Sklar & Assoc. and worked out a Consumer Proposal to put forth to my creditors for my Credit Card debt. She was very courteous, professional and put me at ease with a proposal that I can afford on a monthly basis, which will eliminate my debit in a reasonable timeframe. I would recommend Christine and this firm in a heartbeat. Very happy with the service and attention I got !!
01:59 11/15/22
Excellent customer service. Special thanks to Olga for being prompt and helpful. She’s a star. Bibi is helpful as well. Great agency to work with.
19:28 11/14/22
After seeing your commercial play on CP24, I realized that it addressed all the questions and concerns I had about my financial situation. It all started with my one phone call to your office. I had the extreme pleasure of working with Cori Naron at your St. Clair West office in September 2022. She took the time to explain what my options were knowing that it was a very stressful situation with my debt load. She made me feel at ease with my decision to file a consumer proposal and outlined the benefits to me. She is thorough and her attention to detail is outstanding. While it takes a little while to reap the benefits of making this hard decision, she took the time to reassure me that it was in my best financial interest. Well done David Sklar & Associates for having such an amazing representative at your company and for allowing me to "get a fresh start"!
14:31 11/14/22
Very highly perfection individual, well executed and greatly knowledgeable in his work, which guided me me the right decisions making opportunities. Thank you.Sincerely, Peter Romasz
20:18 11/13/22
Trina Powell was very helpful and made the process very easy. Thanks again for all your help.
17:59 11/06/22
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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.