What are the Advantages of Filing a Consumer Proposal Instead of Declaring Bankruptcy in BC?

The Benefits of Opting for a Consumer Proposal Over Bankruptcy in British Columbia

In the realm of debt management, understanding the various alternatives can be daunting, particularly when grappling with financial stress. One option that has gained traction in British Columbia is the Consumer Proposal. This legal debt management tool, often considered Canada’s top alternative to personal bankruptcy, offers an array of advantages.

Understanding Consumer Proposals

Consumer Proposals are specialized debt consolidation tools that can significantly reduce debt without incurring additional interest or fees. They offer a comprehensive solution to almost all kinds of debts, including government debts such as income taxes and student loans.

The terms of a Consumer Proposal are tailored to each individual’s unique circumstances, which makes it a viable option for many people. Despite being a longstanding legal debt management tool, many Canadians are pleasantly surprised when they discover this consolidation solution that not only provides protection from creditors but also presents a favorable alternative to personal bankruptcy.

Comparison Between Consumer Proposals and Bankruptcy

It’s common knowledge that both Consumer Proposals and personal bankruptcy can provide immediate relief in debt management. They offer benefits such as:

  • Restructuring various types of debts, including credit card debt, overdrafts, tax debt, ICBC debt, payday loans, and student loans.
  • Saving money by halting interest charges and reducing or eliminating debts.
  • Providing respite from creditors, payments, and collection activities.
  • Offering professional support throughout the process, along with qualified financial counseling.

However, a Consumer Proposal might be a better choice when considering the following aspects:

Flexible Terms and Conditions

One of the benefits of filing a Consumer Proposal is its flexibility in terms of repayment. This method generally implies repaying an affordable portion of the total debt to settle it in full. The payment terms are quite flexible and can cater to many different situations.

Impact on Credit History

A Consumer Proposal reflects on your credit history for only three years following completion or six years after it begins, whichever is sooner. In contrast, a personal bankruptcy stays on your credit report for six years after completion.

Handling Additional Assets

The law in British Columbia provides certain ‘exemptions’ that protect many of your assets from seizure to pay debts. Though most people keep all their assets in a personal bankruptcy, in certain circumstances, a person may hold an asset worth more than the BC asset exemption allowances.

Implications for Self-Employment

While there is no limit on your earning potential during a bankruptcy or Consumer Proposal, and it is also possible to be self-employed during either process, bankruptcy does restrict the type of business structure that you can operate during the bankruptcy.

Expert Consultation

As experts in debt consolidation, Consumer Proposals, and personal bankruptcy, Bankruptcy Canada’s qualified Licensed Insolvency Trustees can help you evaluate your situation and assess all your potential solutions so you can make the decision to move forward with your best option to get out of debt.

Contact Information

To assist you in making the best decision, Bankruptcy Canada offers a free, confidential debt consultation with a BC Licensed Insolvency Trustee. You can book your consultation today.


In conclusion, opting for a Consumer Proposal instead of declaring bankruptcy in British Columbia can provide a multitude of advantages. From flexible terms and conditions to less impact on credit history, handling additional assets, and implications for self-employment, a Consumer Proposal can be a better alternative for many individuals. However, it’s always essential to consult with experts, like Bankruptcy Canada, to assess your unique circumstances and make an informed decision about the best course of action.

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