Guest Commentary by Howard Hayes, Consumer Proposal Administrator
I met with Fred (not his real name) in my Cambridge, Ontario consumer proposal and bankruptcy office, and Fred was worried. He had debts, but couldn’t refinance his house because real estate values weren’t going up. The recession had taken it’s toll on Fred.
You can read his full story here in my article on why a consumer proposal is better than bankruptcy, but I can tell you that Fred decided to file a consumer proposal, because it gave him five key advantages:
- Fred did not have to file personal bankruptcy in Canada
- He’ll have a fixed payment to make each month (even if his income increases during the proposal, the payment will stay the same – this is different to a bankruptcy whereby the more you make the more you have to pay due to surplus income).
- He does not have to report his income to the trustee like he would have in the bankruptcy
- The proposal is better on his credit rating than a bankruptcy
- He’ll keep his tax refunds that he would have lost in a bankruptcy
- He kept his house and all other assets he might have lost in the bankruptcy
For Fred, a consumer proposal was the correct solution.