case studies,  consumer proposal,  personal bankruptcy

Can you file a bankruptcy if you can afford a consumer proposal?

Hi all, here for various reasons.

Young and dumb, was offered credit cards and a line of credit and took them on. Made a lot of irresponsible decisions.

I make $60k/year, live in Winnipeg. Live with my partner but we aren’t considered common-law yet. I’m 27f.


13k Cashback Mastercard

5k Avion Visa

27k Line of Credit

All with RBC

I was able to stay on top of my monthly payments for a while, managed to reduce my debt to 25k for a while and carried that. Then life just happened. The past 2 years or so has been rough. My partner was unemployed for a about six months, we got behind on utility bills.

Other info: For my share of rent/bills, I pay

Rent- $600

Phone- $110

Internet- $70

A handful of streaming services that probably add up to $50

Hydro- varies, average ~$100

Water- quarterly per year, my share every 3 months is about $150

Car insurance $115

Just one of the CC’s minimum payments is $500 and that’s already over limit I haven’t been able to touch the LOC in months because of unexpected expenses

My chequing account keeps going into the negatives due to bills automatically coming out. Then I’m hit with overdraft fees, etc.

No assets aside from a 2011 car that’s on its way out, could probably get $1k max for it

Also a smoker, which is dumb I’m aware. Have tried to quit many times but it’s hard when you’ve been doing it since age 15.

I also have a dog and 2 cats

Because my partner was unemployed and is now only making minimum wage, it’s been very difficult staying on top of everything.

I booked a consultation with a Licensed Insolvency Trustee for next week but have been reading a lot on consumer proposals vs bankruptcy. It seems the consensus is that if you have no real assets, it makes most sense to go for bankruptcy.

Does anyone have any advice or thoughts?

Thank you


Victor Fong, Licensed Insolvency Trustee replies:

You’re single (i.e., not married) with no dependents (i.e., no children) and you earn $60,000 per year.

Moreover, your living costs are relatively low.

If you file bankruptcy it’s quite likely that:

  1. Your creditors will ask why you didn’t attempt to settle with them through a consumer proposal

  2. The Office of the Superintendent of Bankruptcy (the government regulator which licenses LITs) will inquire why you didn’t attempt to settle with your creditors through a consumer proposal

  3. The LIT would have to oppose your discharge on the basis that you could have made a reasonable settlement through the CP process but chose to file a bankruptcy

The Bankruptcy and Insolvency Act is designed to maximize the recovery to the creditors.

Therefore, if someone who has the ability to repay some of their debt decides to take the “easy” route of a bankruptcy, he or she will run into the scenario described above.

Good luck.


Victor is the President of Fong and Partners Inc. He is a Licensed Insolvency Trustee and Chartered Professional Accountant. With many years of experience in the insolvency field, Victor has been involved in both corporate and consumer insolvency engagements. Previously with a large national firm, Victor founded Fong and Partners Inc. so that he could dedicate his professional life to help people from all walks of life to deal with their debt.