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Difference Between Consumer Proposal and Bankruptcy

The main difference between consumer proposals and personal bankruptcy is that a consumer proposal allows you to keep more of your assets, has less of an effect on your credit score and will stay on your record for 3 years instead of 6 years for a first-time bankruptcy.

Consumer proposals and personal bankruptcy are common debt relief solutions in Canada. A consumer proposal is a formal agreement with your creditors on the terms of repayment of your debts. Bankruptcy involves you surrendering your assets to eliminate your debt repayment obligations.