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There are a number of options to manage your personal debt issues in Canada, but the top two  options are either to make a consumer proposal, or to file for personal bankruptcy. Below we explore the differences between these two options to help you make an informed financial decision.

Consumer Proposal Bankruptcy
Suitable for as little as $1,000 of unsecured debt to as much as $250,000 (excluding mortgage). Suitable for anyone who has more than $1,000 of unsecured debt. No upper limit.
Keep your assets, such as your house, vehicle and RRSPs. Keep up to $32,000 in “exempt” assets.
Fixed monthly payment until end of proposal (up to five years). Monthly payments based on your income.
Keep all of your tax refund(s) and/or tax credits. All tax refund(s) and/or GST credits must be surrendered (does not include child tax credits).
Can continue to act as a director of a limited company. Cannot act as a director of a limited company; however, you can be self-employed.
No income and expense reporting required. Reporting of all income and expenses must be submitted to your trustee monthly.
R7 credit rating. Affects rating for repayment period plus three years after last payment. R9 credit rating. Affects rating for the period of bankruptcy plus six years after discharge for a first bankruptcy.

While this gives a general overview of both options, it is important to review your specific circumstance to determine which option is right for you. To find out more about how Smythe Insolvency can help you and your financial situation, call us today for your free no-obligation consultation and get on the road to financial freedom.

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