A Consumer Proposal can be beneficial in the following ways:
“Surplus income” is not a consideration, as it is in bankruptcy.
Your assets are not at risk, and they will not have to be surrendered to the administrator as part of your proposal agreement.
Also, once your proposal has been accepted your payments will not increase if your income increases. You will owe nothing more than in the agreed upon terms of the proposal.
The negative effect on your credit score is generally not as severe as in a bankruptcy. Consumer proposals typically produce an R7 rating, whereas personal bankruptcy will produce an R9, which is the lowest rating, and why you should investigate all other options prior to choosing to file for bankruptcy.
If you file a consumer proposal, you have the opportunity to repay a portion of your debt. The sense of control you regain can bring a dramatic improvement in self esteem.
※ Why would your creditors accept a Consumer Proposal
Most creditors don’t want you to go bankrupt. In this case, they may expect to receive nothing at all. A proposal will generally allow them to recover more than they would in a bankruptcy.
