Why is it a good idea to consider filing a consumer proposal if you have previously filed personal bankruptcy?
Filing a consumer proposal is not bankruptcy. Therefore by filing a consumer proposal someone that has been bankrupt previously can avoid a second personal bankruptcy filing. This is important because the personal bankruptcy process for a second time bankrupt is a much longer process, in some cases up to 36 months, and the bad credit rating (link) that results from a second time filing personal bankruptcy stays on the credit bureau report for 13 years after the discharge. This means that filing personal bankruptcy for a second time could affect the credit rating for up to 16 years from the date of filing. Whereas filing a consumer proposal affects the credit rating for 3 years after the proposal is paid in full.
-Chris Welker
