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Serving Manitoba and the Northwest Territories. Offices in Brandon, Winnipeg and Yellowknife.

I want to file a consumer proposal, but my Trustee keeps talking about what happens in a bankruptcy? Does a bankruptcy matter if I want to file a Proposal? Why?

We get this question all the time. ALL the time. If you aren’t sure why a bankruptcy matters if you want to file a Consumer Proposal – and AVOID a bankruptcy, read on!

Although it might not feel like it, your Trustee is working to ensure that your creditors understand WHY your proposal should be accepted. Your Trustee is required to report to your creditors on how much he or she thinks they’ll get in your proposal, and then compare it to how much they’ll get if you filed a bankruptcy.

But I don’t want to file bankruptcy! Why does it matter??

Right. No bankruptcy – we understand. But from your creditors point of view, you have to give them a reason to vote for your proposal! If they would get more from your Trustee if you chose a bankruptcy, it would be ridiculous for them to accept a proposal.

Creditors must always get MORE in a proposal than they would if you chose a bankruptcy. Read that again…….

Creditors must always get MORE in a proposal than they would if you chose a bankruptcy.

Otherwise…..they’ll vote against your proposal, and wait until you file bankruptcy. Every single time. Starting to see why a bankruptcy matters even if you want to file a Proposal?

So – back to why your Trustee is fixated on the bankruptcy. You have consulted your Trustee in hopes of ‘cutting a deal’ with your creditors. Paying your debt on your terms. In order to make sure that happens, your Trustee will help you understand how much you should offer. In order to know how much you should offer, your Trustee will calculate what a bankruptcy is worth, because that’s the absolute least amount your creditors would accept. Your Trustee is calculating what your ‘bottom line’ is. Follow that?


If your bottom line is a bankruptcy worth 10% on the dollar to your creditors……offer them 20% in a proposal.

If your bottom line is a bankruptcy worth 50% on the dollar to your creditors…..offer them 75% in a proposal.


Only your Trustee can give you advice on what amounts you should offer, after considering the type of creditors you have, the amounts you owe, and how you can use your assets and income to reach a deal with them.  They are experienced and have watched how creditors vote and what creditors consider when voting on proposals. They have in depth knowledge of how to calculate what a bankruptcy is worth – your ‘bottom line’. And they want to set you up with a proposal you can afford.

Want to know what your ‘bottom line’ number is? Contact us today!