Question: I’ve heard that a consumer proposal is another form of bankruptcy. Would it be treated as such on credit applications where it often asks “have you ever filed for bankruptcy?” Would I need to say yes? Anything else to be concerned about?
Alternative To Bankruptcy
The confusion occurs because both consumer proposals and bankruptcy are governed by the Bankruptcy & Insolvency Act, and bankruptcy trustees are licensed to assist with both procedures.
A consumer proposal will appear on your credit report; you will receive an R7 rating for three years after your proposal is completed. A bankruptcy remains on your credit report for 6 years after you are discharged, and you receive an R9 rating, so they are different procedures, with different implications.
There are many advantages to filing a consumer proposal over bankruptcy but the best solution always depends on each persons individual situation. That is we we suggest you contact a trustee for a free consultation to review your options.