Lana Gilbertson, Licensed Insolvency Trustee with MNP Debt in Vancouver, discusses why an individual should file a consumer proposal versus a bankruptcy, when a consumer proposal is a viable option.
In this video, Lana highlights three reasons why a consumer proposal should be filed instead of bankruptcy. First, if a consumer proposal is a viable option and the debtor files for bankruptcy, the bankruptcy trustee must report this fact to the creditors who may then request an extension of the bankruptcy. Second, a consumer proposal provides certainty while bankruptcy does not. For example, if you come into money or property or have an increase in income after a consumer proposal is filed, the proposal terms do not change. By contrast, if you come into money or property or have an increase in income during bankruptcy, more money is paid to the bankruptcy estate. Last, bankruptcy should be a last resort. If you a consumer proposal is a viable option, why would you want to go bankrupt?