Monday, January 12, 2015

Is a Consumer Proposal "always" better than a Bankruptcy filing?

The answer to that question may depend on who you talk to as well as the specifics of your situation. Some trustees prefer proposal filings just because they are simpler to administer than many bankruptcy files while debt consultants like them because they are easier to "sell" (even though they can only be filed by licensed trustees).

Bankruptcies can have advantages over proposals including typically being quicker to resolve, costing less money, usually less negotiability between the debtor and creditors on payment terms and discharged bankrupts are usually re-establishing credit faster than people filing proposals.

Conversely proposals can have advantages over bankruptcies including psychologically, the debtor has made a greater effort to make restitution, and cash flow for people with high surplus income. Proposals help recidivists avoid having a second (or subsequent) bankruptcy on their credit report for 14 years.

At the end of the day it is not possible to say that either solution is "always" better than the other - both have their place and either can be used to help extricate you from serious debt problems.

Check out the blogs on our website for more information, including economic news and views.

http://www.fixmydebt.ca

Posted at 12:23 PM