Use this calculator to get an estimated idea of what a Consumer Proposal might look like for your situation in Canada. This tool helps you understand potential monthly payments, total proposal amounts, and the estimated debt reduction based on your financial details and a target repayment percentage. Remember, this is an estimate, and a Licensed Insolvency Trustee (LIT) will provide an accurate assessment.
Assets not protected from creditors (e.g., equity in a second home, luxury items). Most common assets like primary residence equity (up to a limit), RRSPs, and basic vehicles are often exempt.
Consumer Proposals can be up to 60 months (5 years).
This is the percentage of your total unsecured debt you aim to repay. Common proposals range from 20% to 40%.
Estimated Proposal Details:
Estimated Monthly Payment:
Total Proposal Amount (over term):
Estimated Creditor Payout:
Estimated Trustee Fees:
Effective Debt Reduction:
Your Monthly Disposable Income:
function calculateConsumerProposal() {
// Get input values
var totalUnsecuredDebt = parseFloat(document.getElementById("totalUnsecuredDebt").value);
var monthlyIncome = parseFloat(document.getElementById("monthlyIncome").value);
var monthlyExpenses = parseFloat(document.getElementById("monthlyExpenses").value);
var nonExemptAssetsValue = parseFloat(document.getElementById("nonExemptAssetsValue").value);
var proposalTermMonths = parseInt(document.getElementById("proposalTermMonths").value);
var targetRepaymentPercentage = parseFloat(document.getElementById("targetRepaymentPercentage").value);
// Validate inputs
if (isNaN(totalUnsecuredDebt) || totalUnsecuredDebt < 0) {
alert("Please enter a valid Total Unsecured Debt.");
return;
}
if (isNaN(monthlyIncome) || monthlyIncome < 0) {
alert("Please enter a valid Gross Monthly Income.");
return;
}
if (isNaN(monthlyExpenses) || monthlyExpenses < 0) {
alert("Please enter valid Essential Monthly Expenses.");
return;
}
if (isNaN(nonExemptAssetsValue) || nonExemptAssetsValue < 0) {
alert("Please enter a valid Value of Non-Exempt Assets.");
return;
}
if (isNaN(proposalTermMonths) || proposalTermMonths 60) {
alert("Please enter a valid Proposal Term (12-60 months).");
return;
}
if (isNaN(targetRepaymentPercentage) || targetRepaymentPercentage 100) {
alert("Please enter a valid Target Debt Repayment Percentage (1-100).");
return;
}
// Constants/Assumptions for calculation (these are estimates and can vary)
var FIXED_TRUSTEE_FEE_ESTIMATE = 1500; // Common base fee for a consumer proposal
var PERCENT_TRUSTEE_FEE_OF_PAYOUT = 0.20; // 20% of the funds distributed to creditors
// Step 1: Calculate the amount to repay based on the user's target percentage
var debtToRepayBasedOnTarget = totalUnsecuredDebt * (targetRepaymentPercentage / 100);
// Step 2: Determine the minimum amount creditors would likely accept
// This is the higher of:
// a) The amount based on the target repayment percentage
// b) The value of non-exempt assets (as creditors would get this in bankruptcy)
var minimumCreditorPayout = Math.max(debtToRepayBasedOnTarget, nonExemptAssetsValue);
// Step 3: Calculate the total proposal amount, including estimated trustee fees
// Total Proposal Amount = Creditor Payout + Fixed Trustee Fee + (Percentage of Creditor Payout as Trustee Fee)
var estimatedTotalProposalAmount = minimumCreditorPayout + FIXED_TRUSTEE_FEE_ESTIMATE + (minimumCreditorPayout * PERCENT_TRUSTEE_FEE_OF_PAYOUT);
// Step 4: Calculate estimated monthly payment
var estimatedMonthlyPayment = estimatedTotalProposalAmount / proposalTermMonths;
// Step 5: Calculate estimated trustee fees
var estimatedTrusteeFees = estimatedTotalProposalAmount – minimumCreditorPayout;
// Step 6: Calculate monthly disposable income for comparison
var monthlyDisposableIncome = monthlyIncome – monthlyExpenses;
// Step 7: Calculate effective debt reduction
var effectiveDebtReduction = 0;
if (totalUnsecuredDebt > 0) {
effectiveDebtReduction = ((totalUnsecuredDebt – minimumCreditorPayout) / totalUnsecuredDebt) * 100;
}
// Display results
document.getElementById("estimatedMonthlyPaymentResult").innerText = "$" + estimatedMonthlyPayment.toFixed(2);
document.getElementById("totalProposalAmountResult").innerText = "$" + estimatedTotalProposalAmount.toFixed(2);
document.getElementById("estimatedCreditorPayoutResult").innerText = "$" + minimumCreditorPayout.toFixed(2);
document.getElementById("estimatedTrusteeFeesResult").innerText = "$" + estimatedTrusteeFees.toFixed(2);
document.getElementById("effectiveDebtReductionResult").innerText = effectiveDebtReduction.toFixed(2) + "%";
document.getElementById("monthlyDisposableIncomeResult").innerText = "$" + monthlyDisposableIncome.toFixed(2);
// Affordability warning
var affordabilityWarningElement = document.getElementById("affordabilityWarning");
if (estimatedMonthlyPayment > monthlyDisposableIncome) {
affordabilityWarningElement.innerText = "Warning: Your estimated monthly payment exceeds your calculated monthly disposable income. This proposal might not be affordable. You may need to adjust your target repayment percentage or proposal term, or review your expenses.";
} else {
affordabilityWarningElement.innerText = "";
}
}
/* Basic Styling for the Calculator – feel free to customize */
.calculator-container {
font-family: Arial, sans-serif;
background-color: #f9f9f9;
padding: 20px;
border-radius: 8px;
box-shadow: 0 2px 4px rgba(0, 0, 0, 0.1);
max-width: 600px;
margin: 20px auto;
}
.calculator-container h2 {
color: #333;
text-align: center;
margin-bottom: 20px;
}
.calc-input-group {
margin-bottom: 15px;
}
.calc-input-group label {
display: block;
margin-bottom: 5px;
font-weight: bold;
color: #555;
}
.calc-input-group input[type="number"] {
width: calc(100% – 22px);
padding: 10px;
border: 1px solid #ddd;
border-radius: 4px;
font-size: 16px;
}
.calc-input-group .input-help-text {
font-size: 0.85em;
color: #777;
margin-top: 5px;
}
button {
display: block;
width: 100%;
padding: 12px 20px;
background-color: #007bff;
color: white;
border: none;
border-radius: 4px;
font-size: 18px;
cursor: pointer;
transition: background-color 0.3s ease;
margin-top: 20px;
}
button:hover {
background-color: #0056b3;
}
.calculator-results {
background-color: #e9f7ef;
border: 1px solid #d4edda;
border-radius: 4px;
padding: 15px;
margin-top: 25px;
}
.calculator-results h3 {
color: #28a745;
margin-top: 0;
margin-bottom: 15px;
text-align: center;
}
.calculator-results p {
margin-bottom: 8px;
line-height: 1.5;
color: #333;
}
.calculator-results p strong {
color: #000;
}
.calculator-results span {
font-weight: bold;
color: #0056b3;
}
Understanding the Consumer Proposal in Canada
A Consumer Proposal is a legally binding agreement between you and your unsecured creditors, administered by a Licensed Insolvency Trustee (LIT). It's a powerful debt relief option in Canada that allows you to repay a portion of your unsecured debts, often without losing your assets, and typically with lower monthly payments than you currently have.
What is a Consumer Proposal?
Instead of declaring bankruptcy, a Consumer Proposal allows you to make an offer to your creditors to pay back a percentage of what you owe, or to extend the time you have to pay off the debt, or both. Once accepted, all collection calls stop, interest charges are frozen, and you make one manageable monthly payment to your LIT, who then distributes the funds to your creditors.
Who is a Consumer Proposal For?
This option is generally suitable for individuals who:
Owe between $1,000 and $250,000 in unsecured debt (excluding mortgage on primary residence).
Have a stable income but are struggling to meet their debt obligations.
Want to avoid bankruptcy and keep their assets (like their home, car, and RRSPs).
Are looking for a way to reduce their overall debt burden.
Benefits of a Consumer Proposal
Significant Debt Reduction: You typically repay only a portion of your unsecured debt (often 20-40%).
Stop Collection Calls: Once filed, a "stay of proceedings" is issued, legally stopping creditors from contacting you.
Interest Freeze: All interest on your unsecured debts is frozen from the date of filing.
Keep Your Assets: Unlike bankruptcy, you generally retain all your assets, including your home, car, and investments.
Flexible Payments: Payments are tailored to your financial situation and can be spread over up to 5 years (60 months).
Avoid Bankruptcy: It's a less severe option than bankruptcy, with a less impactful credit rating consequence.
Drawbacks to Consider
Credit Score Impact: A Consumer Proposal will negatively affect your credit score, though generally less severely and for a shorter duration than bankruptcy. It remains on your credit report for three years after completion.
Public Record: It is a public record, meaning anyone can search for it.
Creditor Approval: Your creditors must vote to accept your proposal. If creditors representing more than 50% of the total debt vote against it, the proposal fails. However, most well-structured proposals are accepted.
How it Works
Consult an LIT: You meet with a Licensed Insolvency Trustee (LIT) to review your financial situation.
Develop a Proposal: The LIT helps you craft a formal offer to your creditors, outlining how much you can afford to pay and over what period.
File the Proposal: The LIT files the proposal with the Office of the Superintendent of Bankruptcy (OSB).
Creditor Review: Your creditors have 45 days to review and vote on the proposal.
Acceptance or Rejection: If accepted, you begin making payments to the LIT. If rejected, the LIT can help you revise the offer or explore other options.
Completion: Once all payments are made, you receive a Certificate of Full Performance, and your debts are legally discharged.
Factors Affecting Your Proposal
The success and terms of your Consumer Proposal depend on several factors:
Total Unsecured Debt: The amount you owe.
Monthly Income and Expenses: Your disposable income determines what you can realistically offer.
Value of Non-Exempt Assets: Creditors will expect to receive at least what they would get if you went bankrupt and your non-exempt assets were liquidated.
Number of Creditors: While not directly impacting the offer amount, it affects the voting process.
Your Trustee's Expertise: An experienced LIT can help structure a proposal that is both affordable for you and acceptable to your creditors.
Important Disclaimer
This calculator provides an estimate based on common scenarios and simplified assumptions. It is not a substitute for professional financial advice. The actual terms of a Consumer Proposal are highly individualized and depend on your specific financial situation, negotiations with creditors, and the expertise of a Licensed Insolvency Trustee. Always consult with a qualified LIT to get an accurate assessment and personalized advice for your debt relief options.