Consumer Proposal Calculator Canada: Estimate Your Monthly Payment

A consumer proposal calculator estimates how much you would pay monthly to settle your unsecured debt through a legally binding agreement that typically eliminates 60-80% of what you owe. This free calculator shows your potential monthly payment, total amount paid, and debt forgiven over 3-5 years based on your total unsecured debt, monthly income, and essential expenses. Consumer proposals are governed by the federal Bankruptcy and Insolvency Act and administered by Licensed Insolvency Trustees. They stop collections immediately, protect all your assets, and have a 97-99% creditor acceptance rate.

Used by 12,000+ Canadians — this calculator provides anonymous, instant estimates with no personal information required.

How to Use This Calculator

Enter your total unsecured debt (credit cards, personal loans, payday loans, lines of credit, CRA tax debt), gross monthly income, monthly essential expenses (rent/mortgage, utilities, food, transportation), and province. The calculator estimates your monthly proposal payment, total amount paid over 3-5 years, percentage of debt forgiven, and your approximate debt-free date.

The calculation methodology is based on what creditors would recover if you filed bankruptcy (the “bankruptcy alternative”) plus a 10-30% premium. Licensed Insolvency Trustees calculate your surplus income using federal guidelines, assess non-exempt assets based on provincial exemptions, and add LIT fees of $1,800-$2,500. Your proposal offer must exceed bankruptcy recovery for creditors to accept, which is why 97-99% of properly structured proposals succeed.

Results show typical scenarios—your actual offer will be determined by an LIT during a free consultation based on your family size, provincial asset exemptions, and specific creditor composition.

Who Should Use This Calculator

Use this calculator if you have unsecured debt between $10,000 and $250,000 and cannot afford to repay the full balance within a reasonable timeframe. Consumer proposals work best for people with steady employment or regular income who can commit to fixed monthly payments for 3-5 years but need to reduce their total debt burden to make payments affordable.

This calculator is essential if you’re facing wage garnishment, lawsuits, or aggressive collection calls and need immediate legal protection. It helps you compare the cost of a consumer proposal versus continuing minimum payments that never reduce principal or declaring bankruptcy which may cost more and force asset liquidation.

You should also use this calculator if your credit is already damaged from missed payments or collections. Since proposals provide R7 credit ratings (versus R9 for bankruptcy) and are removed from your credit report 3 years after completion, they offer a faster path to credit recovery than ongoing delinquency.

Consumer Proposal Eligibility Rules

To qualify for a consumer proposal in Canada, you must meet specific federal criteria. Your total unsecured debt must fall between $10,000 and $250,000 for individuals, or up to $500,000 for couples filing a joint proposal. Debt includes credit cards, personal loans, lines of credit, payday loans, most CRA tax debt (income tax, GST/HST, penalties, interest), and medical bills.

You must be a Canadian resident in any province or territory and be insolvent, meaning unable to pay debts as they come due or total liabilities exceed total assets. Most importantly, you need a stable income source sufficient to make monthly payments for 36-60 months—employment income, self-employment, pension, disability benefits, or other regular income all qualify.

Certain debts cannot be included in consumer proposals: secured debts like mortgages and car loans (though you can keep these assets by maintaining regular payments), child support or alimony arrears, court fines and penalties, and student loans if you’ve been out of school for less than 7 years.

Note: Actual offers vary based on assets, income, family size, and provincial exemptions

What Your Calculator Results Mean

Your calculator results show an estimated offer amount, typically 30-40 cents per dollar of total debt. This percentage reflects what creditors would receive—proposals must exceed bankruptcy recovery by 10-30% to gain creditor approval. If bankruptcy would deliver 20 cents per dollar, your proposal might offer 30-35 cents, providing creditors more money while saving you 60-70% of your debt.

Licensed Insolvency Trustees calculate a surplus income baseline for comparison even though consumer proposals don’t require surplus income payments. This calculation shows what you’d pay in bankruptcy based on federal surplus income thresholds ($2,555 monthly for a single person in 2026, adjusted for family size). If bankruptcy would require higher monthly payments due to surplus income, your proposal payment can be lower while still exceeding total bankruptcy recovery.

Your fixed monthly payment remains constant regardless of raises, bonuses, or income increases during the proposal term. This is a major advantage over bankruptcy where surplus income adjustments mean 50% of raises go to creditors. In a proposal, extra income is yours to keep or use to pay off the proposal early with no penalty.

Results showing proposal payments equal to or higher than your current minimum payments suggest limited savings. In such cases, explore debt consolidation or debt payoff strategies if your debt load is manageable. Proposals make most sense when they meaningfully reduce your monthly obligation while providing legal protection.

How This Calculator Works

The calculator uses the same formula Licensed Insolvency Trustees apply when structuring proposals under the Bankruptcy and Insolvency Act (BIA). At its core, every consumer proposal must beat what creditors would recover if you filed bankruptcy instead—known as the “bankruptcy alternative.” The calculator estimates this baseline and then adds a premium to arrive at your proposal offer.

The bankruptcy alternative calculation has three components. First, surplus income: the Office of the Superintendent of Bankruptcy (OSB) sets income thresholds annually that determine how much of your earnings exceed what’s considered necessary for basic living expenses. In 2026, the threshold for a single person is $2,555 per month. For a family of two, it’s $3,181; for three, $3,912; and the amount increases with each additional family member. If your net income exceeds the threshold for your family size, 50% of the overage becomes surplus income payable to creditors in bankruptcy. Second, non-exempt assets: anything you own above your province’s exemption limits (vehicle equity, RRSP contributions made in the last 12 months, investment accounts, tax refunds) would be seized in bankruptcy. Third, LIT administration fees of $1,800-$2,500 are added.

The calculator combines these figures to estimate what bankruptcy would cost your creditors to administer and what they’d recover. Your proposal offer must exceed that recovery by roughly 10-30% for creditors to accept, because the proposal needs to be clearly more attractive than the bankruptcy alternative. This is why the calculator asks for your income, expenses, and province—each variable directly affects the surplus income calculation and asset exemption thresholds.

In plain terms: the math determines the minimum your creditors would accept. Your Licensed Insolvency Trustee then structures a fixed monthly payment over 36-60 months that clears that minimum while remaining affordable for you. If the numbers don’t work for a proposal, the calculator results will reflect that, and taking our debt options quiz can help you identify the best alternative path.

What Creditors See vs What You Pay

Understanding the creditor perspective explains why consumer proposals have a 97-99% acceptance rate and why your payment is lower than you might expect.

When creditors receive your proposal, they evaluate it against a single question: will we recover more money than we would in your bankruptcy? In a typical Canadian bankruptcy, unsecured creditors recover 15-25 cents per dollar owed. The bankruptcy process involves court costs, trustee fees, delays, and the risk that the debtor has few seizable assets. For creditors, bankruptcy is expensive and uncertain.

A consumer proposal changes that equation. Creditors typically receive 30-40 cents per dollar—significantly more than bankruptcy would deliver. They also receive payment over a fixed schedule with no court proceedings, no asset liquidation costs, and no uncertainty. From the creditor’s perspective, accepting your proposal is a straightforward business decision: more money, less risk, lower administrative costs.

This is why your “payment” is actually a negotiated settlement that works in both directions. You save 60-80% of your total debt while creditors receive more than the bankruptcy alternative would provide. The LIT structures the offer at the sweet spot where creditors accept because they’re better off, and you accept because your debt burden drops dramatically.

What creditors don’t see is your future income growth. Unlike bankruptcy where surplus income is recalculated and 50% of raises go to creditors, your proposal payment is locked in. If you receive a raise, bonus, or inheritance during your proposal term, it’s yours to keep. This protection from future wage garnishment and income clawbacks is one of the strongest advantages of choosing a consumer proposal over bankruptcy.

The acceptance rate data confirms this alignment: fewer than 3% of proposals filed by Licensed Insolvency Trustees are rejected, and most rejections occur because the initial offer fell below the bankruptcy alternative threshold—something your LIT will ensure doesn’t happen during your free consultation.

Next Steps After Using the Calculator

Book a free consultation with a Licensed Insolvency Trustee to get an exact proposal calculation based on your specific situation. LITs are federally licensed professionals—the only people legally authorized to file consumer proposals in Canada. The consultation is confidential, costs nothing, and carries no obligation to proceed.

Gather documentation before your consultation: recent pay stubs or income proof, list of all creditors with balances and account numbers, monthly expense breakdown, and information about assets you own (home, vehicles, RRSPs, savings). Most LITs can file your proposal within 24 hours of you signing documents, and collections stop immediately the day of filing through a legal stay of proceedings.

Your LIT will explain the 45-day creditor voting period (during which you’re protected from collections), the two mandatory financial counselling sessions included in your proposal, and the completion process. Once creditors holding 50% or more of your debt by dollar value accept your offer and the court approves it, you’ll make fixed monthly payments for 3-5 years. After your final payment, you receive a Certificate of Full Performance and 60-80% of your debt is legally forgiven.

Consider consulting with multiple Licensed Insolvency Trustees to compare approaches and ensure you’re comfortable with your trustee, as you’ll work with them throughout your 3-5 year proposal term.

Use the Consumer Proposal Calculator now to estimate your monthly payment and see how much debt you could eliminate. Enter your total debt and income for instant results, then book a free consultation with a Licensed Insolvency Trustee to get your exact offer amount and start the filing process.