Compare bankruptcy and a consumer proposal on the same facts

Make the comparison from one shared information pack

A fair comparison uses the same debts, asset values, family facts and income assumptions. Otherwise, a difference in quoted cost may reflect a different input rather than a different procedure. Prepare one dated inventory and ask the trustee to identify any changes used in each estimate.

The OSB's comparison of debt solutions describes bankruptcy and consumer proposals as distinct formal options. The purpose of your worksheet is to make those differences concrete for your circumstances. This guide does not rank one above the other or predict that creditors will accept a proposed arrangement.

Check which proposal procedure is available

Consumer proposals have a statutory consumer-debtor definition in section 66.11. Eligibility is a legal question about the debtor and debts, not simply whether the proposed monthly payment looks manageable.

Ask the trustee to explain which debts count for the relevant eligibility assessment and whether a different procedure needs consideration. Include secured and disputed obligations rather than removing them yourself. A complete list allows the professional to apply the rule. If someone uses only the word “proposal,” ask whether they mean a consumer proposal or another process. Similar labels can conceal different requirements and consequences.

Understand what each procedure asks you to do

A consumer proposal sets terms for repayment through a formal creditor process. The OSB proposal reference describes payments, counselling and completion. Bankruptcy instead involves estate administration, duties and the discharge process.

Ask for the expected actions under each option: documents, reporting, meetings if required, counselling and payments. Make an honest assessment of whether the proposed schedule fits irregular income or other known constraints. The task is not to choose the arrangement with the fewest lines in an advertisement. It is to understand the actual commitment and the steps required to reach its legal end point.

Compare assets and security explicitly

The OSB explains that an accepted consumer proposal allows asset retention provided required secured-creditor payments are made. Bankruptcy property treatment involves the exclusions and applicable exemptions in section 67. Neither statement decides a particular property's outcome without the facts.

Put each important asset on a separate line with its owner, valuation and secured balance. Ask what each procedure would mean for that line. Do not reduce the comparison to “keep everything” versus “lose everything.” A jointly owned home, financed vehicle and registered account raise different questions, and any uncertain valuation should be identified in both estimates.

Compare total commitments and the difficult scenario

For a proposal, ask about the offered terms, total payable, payment schedule and consequence of non-compliance. For bankruptcy, ask which figures are estimates and how income or asset information could change the expected contribution. Get fee explanations as part of the full commitment.

Then test the comparison against a plausible difficult month: reduced hours, a necessary repair or seasonal low earnings. Ask what process would apply under each option if you could not perform as expected. This planning exercise is not a promise that terms can be changed. Its purpose is to identify fragility before choosing a procedure, rather than discovering it after a payment problem occurs.

Keep collection and discharge questions in the comparison

Both procedures have statutory stay provisions, but the applicable sections and exceptions must be considered. The consumer-proposal stay appears in section 69.2. Do not assume that either procedure resolves secured rights, support or other special obligations identically in every situation.

Ask which debts would remain or need separate advice and which completion document you would receive. Credit consequences also matter, but no procedure guarantees future approval or a score. Our credit-reporting guide explains why legal completion and reporting are separate questions. Keep any uncertain debt classification visible instead of burying it in an overall savings percentage.

Use a written decision record

A useful comparison ends with a short record: options assessed, eligibility questions, assets considered, payments estimated, major risks, missing information and reasons for the recommendation. Ask for clarification in plain language if you cannot explain the difference back in your own words.

For a hypothetical worker with variable commissions and a financed vehicle, the comparison should explicitly address income variation and security documents. Those facts are more informative than borrowing a friend's monthly payment figure. Review the full commitment before signing. BankruptcyCanada.ca does not administer either procedure, arrange creditor approval or make an individualized recommendation; a licensed trustee's assessment is the appropriate next step.

Keep the comparison dated. If your income, creditor list or asset valuation changes before a decision, ask whether the earlier recommendation still rests on the same facts. A clear update can be more useful than collecting a second estimate built on information that is already out of date.