2. Decide if a consumer proposal is your best option

A consumer proposal might be a good option to help you get out of debt if you:

• are not able to pay back the whole amount you owe
• have a house, car, or other things that you do not want to lose in bankruptcy
• are able to make smaller payments on your debt to help reduce what you owe

But there are some disadvantages. Your credit rating will go down and your credit report will have a note about your consumer proposal for 3 years after you finish paying the consumer proposal.

Sometimes the effects of a consumer proposal can last longer than those of a bankruptcy. For example, information about a bankruptcy will come off your credit report 6 to 7 years after you are discharged. If you take 5 years to pay off your consumer proposal, a note about it will be on your credit report for a total of 8 years.

You might have other options. For example, you could:

• talk to your creditors
• apply for a consolidation loan
• file for bankruptcy