This is one of the most popular consumer proposal FAQs and the answer is “no”.
In a bankruptcy, your creditors do not have a vote to accept or decline the bankruptcy. When filing for bankruptcy all of your assets (except exempt assets) vest in the Licensed Insolvency Trustee administering your bankruptcy. The Trustee will perform calculations of your income, expenses, assets and liabilities. Based on these calculations you will make a monthly payment to the Trustee for 9 months, 21 months, or possibly longer, depending on your income and if you have previously been bankrupt. During this repayment period you are “undischarged” -meaning that you have to report your income and financial status to the Trustee on a monthly basis.
If your financial circumstances change over the course of the bankruptcy, whether for better or worse, it may change the amount you must pay the Trustee and how long you are bankrupt. Once repayment is complete, and you complete a number of other straightforward duties, you become “discharged” from bankruptcy and your obligations to your creditors are complete.
In a consumer proposal, the Trustee makes a proposal, an offer, to your creditors. If accepted, you typically make a single monthly payment to the Trustee over a period of 4-5 years. During this time you can pay the consumer proposal in full and complete your obligations, which is not the case in a bankruptcy. Also, during a consumer proposal, you do not have to continually report your income to the Trustee. If your income does increase, your proposal payments will not – also unlike a bankruptcy.
Both consumer proposals and bankruptcy offer unique benefits and the best option for you will largely depend on your personal circumstances.