This document provides information about bankruptcy and consumer proposals in Canada. It explains that bankruptcy is for those with over $1,000 in debt and under $250,000 in unsecured debt, and must be filed by a licensed trustee. A consumer proposal allows payments based on income over a period of 9 months to 5 years, after which contact from creditors must cease. The bankruptcy will be reported on a credit rating for 7 years, while a completed proposal is reported for a shorter period.

3. Anyone who is insolvent and
owes more than $1,000.
If your debts do not exceed
$250,000 (excluding mortgage)
and you are able to make monthly
payments toward paying off a
portion of your debt.

4. Must be filed by a
Licensed Insolvency
Trustee.
Must be filed by a
Licensed Insolvency
Trustee.

5. Payments are based
on income, non-
discretionary
expenses and
household size.
With your Trustee, you
determine what
payments you can afford,
and for how long, and an
offer is put together for
the approval of your
creditors. Administrative
costs are included in your
monthly payments.

6. For first time
bankruptcies – a
minimum of 9 months.
Up to 5 years but may
be paid off early with
no penalty.

7. Depending on which province you live
in, many of your assets, including
household furnishings, RRSP’s,
pensions, auto and equity in your
home may be exempt from surrender.
No assets are surrendered.

8. Turned over to your creditors. You are allowed to keep refunds.

9. The bankruptcy will be reported as
an R9 on your credit rating for up to
7 years in a first-time bankruptcy.
Your credit rating will show R9
during the period of the proposal,
and go to R7 once the proposal has
been completed, with all payments
made. This indicates you have made
a settlement with your creditors.

10. You must submit a report that
details all income and expenses
and include pay stubs and certain
receipts.
No monthly reports are required.

11. Contact from
creditors cease
upon filing, and
garnishments are
stopped.
Contact from
creditors cease
upon filing, and
garnishments are
stopped.