Calculating Payments in a Consumer Proposal

How to Calculate Payments in a Consumer Proposal

The consumer proposal drawn up to meet the demands of your creditors will be unique to you, and payments will be calculated after factoring in your income, assets, and the size of your debts.

Typically, you will be asked to settle your debts for around 30-40% on the dollar, but for more detailed advice, a licensed insolvency trustee will be able to explain more after examining your situation and learning more about your creditor.

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Creating Your Consumer Proposal

To determine how much you might need to pay in your consumer proposal, your trustee will consider three things.


  1. Who your creditors are and how much you owe to them
  2. Your personal assets
  3. Your budget and what you might reasonably be able to afford.


These factors will be used when calculating your monthly consumer proposal payment.

We are here to serve your best interests.

When talking to you about the possibility of a consumer proposal, we will ask you to provide us with evidence of your current income and expenditure so we can figure out what you might be able to afford.

We will also work with you to come up with a proposal that your creditor is likely to accept.

If the payment plan is too low, and if they are unlikely to make a profit on it after paying the fees they are liable for, then they might reject the proposal.

Therefore, we will work hard to come up with a realistic figure that serves the best interests of both of you.

So, we will discuss your options with you, give you our advice on what you might be able to afford, and if you are agreeable, continue with the consumer proposal.

If it turned out that you might struggle to make the repayments we suggest, you might then have to consider another debt management solution if an agreement can’t be made with your creditor.

Don’t worry though, as we will ensure you know the best course of action at every step of your journey towards financial freedom, with the advice you need to make the right choices for you.

How We Calculate Consumer Proposal Payments

Before your proposal is prepared and filed, there are a few things your trustee will do as part of the process.

Your trustee will calculate what your creditors will recover if you filed for bankruptcy

We do this because if your creditors think they will get more from you if you filed for bankruptcy, they might reject your consumer proposal.

During a bankruptcy, they would be entitled to any equity you might own, for example, and you would also be expected to pay surplus income payments.

So, once we have worked out the value of what your assets and bankruptcy payments might be, we will come up with a consumer proposal that is more than what your creditor would recover from a bankruptcy.

This way, they are more likely to accept the offer we make them.

Your trustee will review who your creditors are

Some creditors expect more than others, so it is important to gear your consumer proposal towards their expectations and policies.

Some will have internal policies which dictate minimum repayments, for example, and others will want to review your budget to ensure that they won’t be won’t short-changed by your proposal.

Your trustee will do the homework on your behalf and will work with you to create a consumer proposal they will be happy with.

Your trustee will calculate your monthly payments

Your trustee needs to make sure that you will be able to afford the monthly payment.

You would be in difficulty if you couldn’t, and after reviewing your proposal, your creditors might turn you down if they deemed your repayment plan to be unrealistic.

So, when discussing your options,  your trustee will come up with a figure that will suit both you and your creditor.

To calculate your monthly payments, the trustee will take the proposed total payout and divide it by the number of months that make up the length of your proposal.

Payments can last up to 5 years in consumer proposals, so if you wanted the lowest monthly payment, a payment plan covering the full 60 months would be put forward.

However, if you wanted to shorten the plan, your trustee would work out how much you would be able to afford on a monthly basis to make this possible.

Contact Us

To find out more consumer proposals, and to discuss other debt management options, give us a call at (877) 879-4770 or click here to arrange a free consultation evaluation.

The sooner you get in touch with our friendly and experienced team of trustees, the sooner you will be on the road to financial freedom and debt recovery.

Information on Consumer Proposals

Consumer Proposals in Canada – An Alternative to Bankruptcy
What is a Consumer Proposal?
What are the Benefits of a Consumer Proposal?
What are the Steps in a Proposal?
What Debts Are Erased in a Consumer Proposal?
Is There Life After a Proposal?
Consumer Proposal Eligibility
How to Amend a Consumer Proposal

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