Your Path to Debt Freedom
Proposals vs Bankruptcy
|Debts between $1,000 and $250,000, excluding any house mortgages||Debts over $1,000|
|Proposal reflected for 3 years after completion of payments on your credit bureau||Bankruptcy reflected for 6-7 years from date of discharge on your credit bureau|
|Payments determined with Trustee and must be accepted by creditors. Payment Schedule can be up to 5 years and total payment must be greater than creditors would receive in a bankruptcy||Payments set by legislation, equal to 50% of surplus income|
|Discharged upon completion of proposal terms||First time bankrupt discharged by 9 or 21 months, depending on surplus income.Second time bankrupt discharged by 24 or 36 months, depending on surplus income.|
|You can apply for credit with no disclosure||You must inform the lender of your bankruptcy if borrowing more than $1,000.|
- Secured creditors are dealt with directly by debtor to settle debts.
- Anyone who has cosigned any debt with the debtor is still 100% liable for debts co-signed.
- Stops all collection calls.
- Payments can be amended if there is a change in financial situation (proposal needs creditor approval).
- Two mandatory counselling sessions.
- Certain debts not discharged, such as court fines, support arrears, fraud debt, student loans if bankrupt is still a student, or has been out of school for less than 7 years.