About the Consumer Proposal Calculator
A consumer proposal is a legally binding offer, filed through a Licensed Insolvency Trustee (LIT), to repay your unsecured creditors part of what you owe — often over up to five years — with the rest forgiven. This consumer proposal calculator estimates the monthly payment for a given offer and compares the total with what a bankruptcy would likely cost you, which is the yardstick creditors use when deciding whether to accept.
According to the Office of the Superintendent of Bankruptcy (OSB), you can make a consumer proposal if your total debts, not counting a mortgage on your principal residence, are $250,000 or less, and its term cannot exceed five years. In a bankruptcy, if your surplus income is more than $200 a month you must contribute 50% of it, and a first bankruptcy then lasts 21 months instead of 9.
Enter your unsecured debt, the percentage you plan to offer and the term, plus your monthly surplus income (as calculated under the OSB standards for your family size) and the value of assets you would lose in bankruptcy. Trustee fees in a proposal come out of your payments; bankruptcy base costs vary, so enter a trustee’s quote if you have one.
With the default inputs, the estimated monthly proposal payment is $225.00. Change any value above to recalculate instantly.
How to use the consumer proposal calculator
- 1Enter your total unsecured debt and any other non-mortgage debts.
- 2Choose the percentage you would offer and the term, up to 60 months.
- 3Enter your monthly surplus income and the equity in assets you would lose in bankruptcy.
- 4Compare the proposal total with the estimated bankruptcy cost and creditors’ recovery.
- 5Take the figures to a Licensed Insolvency Trustee, who must file any proposal.
Formula and method
The proposal total is the share of your unsecured debt you offer, spread evenly over the term (at most 60 months), and the rest is forgiven when the proposal is completed. Trustee fees are paid from these payments.
For bankruptcy, the OSB rules say that if surplus income exceeds $200 a month you pay 50% of it, and a first bankruptcy lasts 21 months (9 months without surplus payments); a second lasts 36 or 24 months. The estimated cost adds non-exempt assets you would surrender and the base fees you enter. Creditors generally accept a proposal only if it gives them more than they would receive in a bankruptcy — roughly the surplus payments plus asset equity.
- Debt
- Total unsecured debt included in the proposal
- offer %
- Share of the debt offered to creditors
- surplus
- Monthly income above the OSB surplus income standard
Worked examples
$45,000 debt, 30% offer over 5 years
Offering 30% of $45,000 is $13,500, or $225 a month for 60 months, with $31,500 forgiven. In bankruptcy, $600 of surplus income means paying $300 a month for 21 months ($6,300) and losing $3,000 of assets, so creditors would get about $9,300. The proposal beats that, though it costs you more than the $11,100 bankruptcy estimate.
Low surplus income — offer too low
With $150 of surplus income no payments are required in bankruptcy, which would last 9 months, but creditors would still get the $5,000 of assets. A 15% offer of $4,500 is less than that, so it should be raised above about 16.7%.
Second insolvency with high surplus
A second bankruptcy with $900 of surplus income would last 36 months at $450 a month, or $16,200. A 40% proposal of $28,000 costs about $467 a month — more than the bankruptcy estimate, but it avoids a second bankruptcy on your record.
Frequently asked questions
How much do you pay in a consumer proposal?+
It is whatever your creditors agree to, often a fraction of the debt. The offer generally has to give creditors more than they would receive if you went bankrupt, which depends on your surplus income and assets. Payments are spread over up to five years.
Who can file a consumer proposal in Canada?+
The OSB says you can file if your total debts, excluding a mortgage on your principal residence, are $250,000 or less. You must file through a Licensed Insolvency Trustee, and you will attend two financial counselling sessions.
What is surplus income in a bankruptcy?+
It is your net household income above the OSB’s surplus income standard for your family size. If it is more than $200 a month you must pay 50% of it to your trustee, and a first bankruptcy lasts 21 months instead of 9.
What happens if creditors reject my consumer proposal?+
You can amend and resubmit it, consider other options, or declare bankruptcy. A proposal is deemed accepted unless creditors holding enough of the debt request a meeting and vote it down.
Is a consumer proposal better than bankruptcy?+
A proposal lets you keep your assets and avoids a bankruptcy record, but can cost more over a longer period. Bankruptcy can be cheaper for people with low income and few assets. Compare both totals here and discuss them with an LIT.
Results are estimates for educational purposes and are not financial advice. Rates, fees and terms vary — confirm with your lender or a licensed advisor before making decisions.