Bankruptcy is very common for individuals and companies, and the procedures the world over are quite similar. However, there are still some differences in procedures and as such, it is often advisable to understand them during a Vancouver consumer proposal proceeding. A good example of this similarity can be observed between the US and Canada

Differences between the US and Canada

  1. When a person is unable to repay their debts and don’t have a steady income in the US, they file for a Chapter 7 bankruptcy, whereby all their debt is cancelled and assets sold off. In Canada, on the other hand, the same thing happens, only then it’s not called a Chapter 7 but instead just personal bankruptcy.
  2. When you are unable to pay your debts, yet you still have a stable income and assets, a plan can be formulated where your debt will be restructured and paid in a certain program. This is known as a Chapter 13 in the US but only as a consumer proposal in Canada.
  3. You have to hire an insolvency lawyer in the US who will draw up the paperwork that you are going to take to court. In Canada, you have to go directly to the bankruptcy trustee office to file the bankruptcy options.
  4. A bankruptcy lawyer is assigned to your case in the US to check for red flags and any signs of fraud. In Canada, the trustee’s office will then assign one bankruptcy trustee to supervise your case for the same signals.
  5. Bankruptcy issues are dealt with under Title 11 of the United States code, while the Vancouver consumer proposal is addressed by the Bankruptcy and Insolvency Act of Canada.

The role of the bankruptcy trustee

  1. Review of your petition and payment plan: you have to send your trustee all documents regarding your income, taxes, assets, expenses and your proposal for a payment plan. They then have to verify the accuracy of these documents and determine whether your expenses are reasonable.
  2. Reviewing creditors’ claims: the trustee will then go over the amount of debt as claimed by the creditors to verify if it is accurate.
  3. Meeting with creditors: a meeting is conducted under oath between all the parties involved to ascertain the validity of your documents and decide whether they agree with your repayment plan.
  4. Administration of the repayment plan: the trustee is in charge of receiving the amount claimed by the creditors and distributing it to them as per the agreed upon repayment plan. A consumer proposal does not go past 5 years, and the trustee will be in charge for this period. They are also likely to take a cut from this as payment for their work.

Effects of filing a Vancouver consumer proposal

There are some advantages and advantages you will experience after filing your consumer proposal, and this is always better than the more radical personal bankruptcy. You still get to keep some of your assets and may even be exempt from certain repayments such as the student loan payments.

On the other hand, some creditors may not agree with your repayment plan and the whole process is going to cost you. Besides, defaulting on your repayment plan will not be grounds for another consumer proposal; you will then have to get a personal bankruptcy application.


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