Consumer Proposal vs. Bankruptcy: Which Is Right for You?

Facing overwhelming debt can feel isolating, but you’re not alone—and you do have options. For Manitobans carrying $10,000 to $50,000+ in unsecured debt, two common legal solutions are consumer proposals and bankruptcy.

Here’s how to figure out which path may work better for you:

1. Do You Want to Keep Your Assets?

A consumer proposal lets you keep your house, car, and personal belongings. In bankruptcy, some assets may need to be surrendered, depending on your equity and Manitoba’s exemption rules.

2. Can You Afford Monthly Payments?

Consumer proposals require monthly payments based on what you can afford. If your income is unstable or very low, bankruptcy may be more realistic.

3. How Much Debt Do You Have?

Consumer proposals are suitable for unsecured debts up to $250,000 (not including your mortgage and other debts secured against your primary residence). Bankruptcy can be used regardless of debt amount.

4. What’s the Impact on Your Credit?

A consumer proposal is marked as an R7 on your credit report and stays for 3 years after completion or 6 years after filing, whichever is earlier. Bankruptcy is rated R9 and in Manitoba it remains for 6 years after discharge, or even longer if it is not your first bankruptcy filing.

5. Do You Need Legal Protection Now?

Both options provide immediate relief from collection calls, wage garnishments, and legal action once filed.

Manitoba Case Example:

A Winnipeg homeowner earning stable income and carrying $45,000 in credit card debt wanted to avoid losing their house. They filed a consumer proposal and reduced their debt by nearly 50% without giving up any assets.

Final Thoughts:

Deciding between a consumer proposal and bankruptcy depends on your income, assets, and long-term goals. At Lazer Grant in Winnipeg, we help you weigh both options and guide you toward the best financial solution.

📞 Book a free consultation today and take the first step toward a fresh start.