Consumer Proposal Calculator Ontario Canada

This calculator helps you estimate your monthly payment, total repayment amount, and interest charges when considering a consumer proposal in Ontario, Canada. A consumer proposal is a formal agreement between you and your creditors to repay a portion of your debts over a set period.

How Consumer Proposals Work in Ontario

A consumer proposal is a debt settlement process where you propose a payment plan to your creditors. In Ontario, this is governed by the Consumer Proposal Act, which provides a structured way to negotiate lower interest rates and reduced debt amounts.

Key Features of a Consumer Proposal

Debt Reduction: Creditors typically accept 50-80% of the outstanding debt amount.
Lower Interest Rates: You may qualify for reduced interest rates on your debts.
Payment Plan: You agree to make monthly payments over 1-5 years.
No Bankruptcy: A proposal does not appear on your credit report.

Eligibility Requirements

To be eligible for a consumer proposal, you must:

Have regular income
Have debts that are unsecured (credit cards, lines of credit, etc.)
Not be in arrears on any debts
Have no recent bankruptcies

Note: A consumer proposal is different from bankruptcy. It's a formal negotiation process, not a legal declaration of insolvency.

How to Use This Calculator

This calculator estimates your monthly payment and total repayment amount based on the following inputs:

Total Debt: The sum of all your unsecured debts
Proposal Amount: The portion of your debt you propose to pay (typically 50-80%)
Interest Rate: The reduced interest rate you negotiate with creditors
Term (Years): The length of your repayment plan (1-5 years)

Enter these values in the calculator to get an estimate of your monthly payment and total repayment amount.

Monthly Payment = P * (r * (1 + r)^n) / ((1 + r)^n - 1)

Where:
P = Proposal Amount
r = Monthly Interest Rate (Interest Rate / 12 / 100)
n = Number of Payments (Term * 12)

Example Calculation

Let's say you have $20,000 in unsecured debts and propose to pay 70% of that amount ($14,000) over 3 years at a 5% annual interest rate.

Monthly Payment: $463.45

Total Repayment: $16,363.80

Total Interest Paid: $2,363.80

This example shows how a consumer proposal can help you manage your debts by reducing the amount you owe and lowering the interest rate.

Frequently Asked Questions

What is the difference between a consumer proposal and bankruptcy?

A consumer proposal is a formal negotiation with creditors to repay a portion of your debts over time, while bankruptcy is a legal process where a court dismisses your debts. A proposal does not appear on your credit report, whereas bankruptcy does.

How long does a consumer proposal take?

The process typically takes 4-6 months, including time for creditors to accept your proposal and for the court to approve it.

Can I keep my assets in a consumer proposal?

Yes, unlike bankruptcy, you can generally keep your assets in a consumer proposal. However, some assets may be subject to claims from creditors.

What happens if I miss a payment in a consumer proposal?

Missing payments can lead to the proposal being rejected, and your debts may resume as they were before the proposal. It's important to make all payments as agreed.