How Consumer Proposal Payments Are Calculated

Generally speaking, consumer proposal payments result in settling your debts for roughly 30-40 percent on the dollar.

However, the cost of a consumer proposal varies for each person based on a few factors, including income, assets, and debts.

You may be thinking to yourself and wondering, “How are Consumer Proposal Payments Calculated,” so you know what to expect.

Your trustee or consumer proposal administrator will work with you to determine how much to offer your creditors and get a better idea of what your consumer proposal payments would be.

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Crafting A Plan

The consumer proposal process will consist of you working together to create a plan that you’ll offer to your creditors.

How consumer proposal payments are calculated depends on a few factors.

Your trustee will look at three basic elements to help determine how much you should pay in a consumer proposal.

They are as follows:


  • Who you owe money to and how much you owe.
  • What, if any, assets that you have or what you would have to pay in the event of bankruptcy.
  • It depends on your budget and whether or not you can afford the payment.


The monthly amount you will owe in a consumer proposal will depend on any one or a combination of the three factors outlined above.

Figuring out the payment amount is typically the final step before getting together to file the documents with the Superintendent of Bankruptcy.

There are a few pieces that must be in place before a trustee is satisfied that the monthly payment is affordable.

For example, they look at the family budget, that creditors will recover more than what they are likely to recover in personal bankruptcy, and that you’re offering enough that would strongly suggest creditors will vote in favour of accepting the proposal.

The main point to keep in mind is that every person’s situation is unique and different.

The decision about how much to offer truly can’t be made until after you and your trustee have had a chance to sit down and review all of your financial information.

How Consumer Proposal Payments Are Calculated

Your trustee will take the following steps as part of the process of calculating your payments before preparing and filing your proposal.

Step 1: Calculate Expected Recoveries

For starters, your trustee will want to calculate what the creditors would recover if you file bankruptcy.

For instance, in a bankruptcy, then creditors would be entitled to any equity you have in a house.

You might also have to pay your creditors additional monies based upon the amount of your income during a bankruptcy.

The higher your income, the more you’ll be required to pay.

You may be familiar with it, but it’s referred to as Surplus under the Bankruptcy and Insolvency Act.

The reason you do all this is that you need to make sure the consumer proposal offers more than the estimated recoveries for your creditors in the event of bankruptcy.

Determining the value of your assets and bankruptcy payments will provide you with these answers.

Step 2: Understand Creditor Expectations

You’ll also need to understand who your creditors are because some will expect more than others.

You need to ensure they’re satisfied with your efforts.

Creditors might have internal policies requiring minimum payouts or will take a closer look at your budget plan in the proposal and review specific expenditures to achieve this goal.

Payments in a consumer proposal are less than other debt-relief options in most cases.

Step 3: Calculate Your Monthly Payment

The final and third step will be to analyze your budget needs to ensure that you can afford the monthly payment that will be required to get the creditors to accept your proposal.

The calculation itself is truly quite simple and straightforward.

Your trustee will take the proposed total payout, based on expected realizations and creditor requirements, and divide it by the number of months in the length of your proposal.

The payments can last up to five years or 60 months in a consumer proposal.

One way to obtain the lowest monthly payment is to spread out the payments over the full 60 months.

However, you can and should consider shortening your proposal term if you can afford to pay more each month.

You might also want to think about offering a lump sum payment if it becomes feasible for you.

What to Expect

You’ll undoubtedly want to enlist the help of an expert who has experience calculating these payment figures when the time comes for you.

You’ll want someone on your side who knows what will and won’t work when dealing with your creditors.

You should know that only a licensed Trustee in Bankruptcy is authorized to file a consumer proposal under the Bankruptcy and Insolvency Act.

Taking Action

If you need assistance calculating your consumer proposal payments, then you’ve come to the right place.

At Bankruptcy Canada, we’re experienced in the area and happy to step in and help you succeed financially.

The good news is that the answer is, yes, you can reduce your debt by up to 70 percent if you take the right approach.

However, remember that each situation is unique and different.

It’s worth a consultation to start mapping out what your payments might be in a consumer proposal so you can plan accordingly.

Contact us today so we can help you make an attractive proposal to your creditors that they’ll accept.

It won’t be long before you’re paying down debt and freeing up more of your money so that you can discover what it feels like to experience financial freedom.

Overall, the benefits of filing a consumer proposal each add up to a financial future that you can control at last.

No longer will you have to worry about extended interest periods and the uncontrollable weight of debt.

Instead, a consumer proposal will provide a light at the end of the tunnel, and allow you to get back on track and your feet in no time.

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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