Consumer Proposal Calculator Canada 2026 Updated for 2026
Struggling with $10,000+ in unsecured debt? A consumer proposal is a powerful, legally binding solution that reduces your total debt and stops interest—without bankruptcy. Use our consumer proposal calculator Canada to get an instant monthly payment estimate based on your income, dependents, and total debt load.
Licensed Insolvency Trustees (LITs) use surplus income guidelines to determine affordable payments. Our tool reflects 2026 federal thresholds, helping you prepare for a proposal in Ontario, Alberta, BC, Saskatchewan, Nova Scotia, and across Canada.
Quick facts: consumer proposal 2026
- ✔ Reduce unsecured debt by up to 70–80%
- ✔ Maximum term: 60 months (no interest accrual)
- ✔ Keep your assets (home, vehicle, RRSPs)
- ✔ One monthly payment to a Trustee
- ✔ Surplus income formula: (net income – threshold) × 50%
Consumer proposal payment estimator
Enter your details (all fields in CAD, monthly net income)
📊 Estimated monthly payment
Total over 60 months: $0
Debt reduction: 0%
Based on 2026 surplus income thresholds (single $2,685 + $706/dependent). Not an official offer; consult a Licensed Insolvency Trustee.How Are Consumer Proposal Payments Calculated? (2026 Surplus Income Rules)
Under Canada’s Bankruptcy and Insolvency Act, your consumer proposal payment depends on two key factors: surplus income and creditor recovery. The government updates surplus income thresholds annually. For 2026, the monthly threshold for a single person is $2,685 (estimated), plus $706 for each dependent. If your net monthly income exceeds this threshold, 50% of the surplus is available for your proposal payments. Trustees also consider your total debt to ensure the offer is reasonable (creditors usually accept proposals offering 20–40% of the debt over 60 months).
Use the consumer proposal payment calculator above to see a personalized range. For example, in Ontario or Alberta, the federal thresholds are identical, so the results apply province-wide.
Consumer Proposal vs Bankruptcy: 2026 Comparison Table
| Feature | Consumer Proposal | Bankruptcy |
|---|---|---|
| Credit rating impact | R7 (stays for 3 years after completion) | R9 (stays 6-7 years) |
| Assets (home, car) | Keep all assets | May lose non-exempt assets |
| Monthly payments | Based on surplus income + debt, fixed term | Based on surplus income + possible additional payments |
| Total debt reduction | Negotiated (typically 30–70% write-off) | Most unsecured debts discharged |
| Duration | Max 60 months | 9–21 months (first-time), 21–36 months with surplus income |
| Public record | Yes (proposal filed) | Yes (bankruptcy) |
A bankruptcy vs consumer proposal calculator can help decide which route fits your situation. Generally, a proposal is better if you have stable income, assets to protect, or professional licensing concerns.
Step-by-Step: How to Calculate Your Consumer Proposal Payment (Ontario, BC, Alberta)
- Determine net monthly income – all household earnings after taxes, deductions, and child support.
- Apply 2026 surplus income threshold – subtract your family’s threshold ($2,685 base + $706/dependent).
- Calculate monthly surplus – surplus = net income – threshold (if negative, surplus = $0).
- Available proposal payment (50% rule) – surplus × 0.5 = minimum affordable monthly payment.
- Creditor minimum test – your total payment over 60 months should be at least what creditors would receive in bankruptcy (approx. 15–25% of debt).
- Final estimate = max(minimum surplus payment, debt × 0.25 / 60) within a feasible range.
Exclusive insight: Real-life example (Toronto, 2026)
Client scenario: $58,000 credit card + line of credit, net income $4,200/month, spouse + 1 child (2 dependents). Threshold = $2,685 + ($706×2) = $4,097. Surplus = $103. Monthly payment capacity = $51.50. Creditors would expect ~$230/month (25% recovery). Final negotiated proposal: $225/month × 60 months = $13,500 total (77% debt forgiveness). Proposal accepted within 45 days.
Common mistake: Hiding income or ignoring spousal contributions. LITs calculate household surplus even if only one spouse files – always be transparent.
Province-Specific Considerations: Ontario, Alberta, BC, Saskatchewan & Nova Scotia
While the federal surplus income framework applies across Canada, certain provincial exemptions (e.g., vehicle equity limits) differ. However, consumer proposal calculator Ontario uses the same surplus thresholds as a consumer proposal calculator Alberta or consumer proposal bc calculator. If you live in Quebec, the rules are similar but administered under provincial supervision. For residents of Manitoba or Nova Scotia, the 2026 guidelines remain uniform – only court filing costs vary slightly.
Trustees like BDO, MNP, and Hoyes provide their own tools, but our consumer proposal payment calculator Canada gives a transparent, unbiased estimate. Many users ask: “consumer proposal calculator reddit” – our tool is built with the same logic recommended by insolvency forums.
Checklist: Is a Consumer Proposal Right for You? (2026 Edition)
- ☐ Total unsecured debt exceeds $10,000 (no upper limit except for major corporations)
- ☐ You can’t pay debts in full but have a steady monthly income
- ☐ You want to avoid wage garnishment or legal actions
- ☐ You own assets (home equity, vehicle) you’d like to protect
- ☐ You’ve considered bankruptcy but prefer a less severe credit impact
- ☐ You can commit to monthly payments for up to 5 years
Quick tip: Use our how much consumer proposal calculator to test different income/debt scenarios. If your estimated payment is more than 20% of your net income, ask a trustee about alternative terms.
Timeline of a Consumer Proposal Process in Canada
📅 Weeks 1-2: Meet with Licensed Insolvency Trustee (free consultation). Provide financial details, get proposal drafted.
📅 Week 3: Proposal filed with the Office of the Superintendent of Bankruptcy; creditors have 45 days to vote.
📅 Day 45: If majority (dollar value) accept, proposal is binding. You start monthly payments.
📅 Months 1-60: Make payments to trustee; they distribute to creditors. No interest accrues.
📅 Completion: Certificate of Full Performance – you are debt-free and can rebuild credit.
2026 update: New e-filing systems reduced administrative delays; most proposals get creditor approval faster.
Frequently Asked Questions (2026 Consumer Proposal)
A consumer proposal is a formal debt settlement agreement filed through a Licensed Insolvency Trustee, allowing you to pay back a percentage of your unsecured debts over a maximum of five years.
It uses your net income, number of dependents, and total debt to apply 2026 surplus income thresholds and a creditor minimum recovery of about 25% to produce an affordable monthly range.
Yes, surplus income thresholds are federal, so the same formula works for consumer proposal ontario calculator and consumer proposal bc calculator. Always confirm with a trustee.
Yes, most income tax debts (including HST/GST) are eligible. Interest stops after filing.
If your net monthly income exceeds the government threshold, half of the surplus must be directed toward your proposal. This calculation is mandatory under Canadian insolvency law.
Major firms use similar surplus income logic; our independent estimator gives you a free, transparent range without requiring personal information.
You must inform your trustee. If income drops, you may request a payment reduction. If income rises significantly, surplus income rules may increase your payments.
Legal & financial disclaimer
TotalCalcHub’s Consumer Proposal Calculator provides estimates for educational purposes only. Results are not a formal proposal nor a substitute for professional advice from a Licensed Insolvency Trustee. Surplus income thresholds for 2026 are estimates based on projected CPI adjustments. Always consult an LIT before making financial decisions. By using this tool, you agree to our Terms of Use.