How much should a consumer proposal offer? Sizing the payment step by step
How a Licensed Insolvency Trustee sizes a consumer proposal offer in Canada: the bankruptcy benchmark, fees, the OSB levy, affordability and lump-sum offers, with worked numbers.
A consumer proposal offer is usually sized in three steps: estimate what creditors would receive if you went bankrupt (non-exempt assets plus surplus income, minus the trustee's tariff fees and the 5% OSB levy), make sure your offer leaves creditors clearly more than that after the proposal's own fees, and check that the monthly payment is one you can sustain for up to five years. In the illustrative example below, creditors would receive about $7,850 in a bankruptcy; an offer of $300 a month for 60 months ($18,000) would leave them about $12,830, which is a credible offer. There is no legal minimum percentage, and creditors decide.
Part of the debt relief worked examples. All figures are illustrative; fees use the BIA General Rules in force on 27 October 2026, before sales tax. Not legal or financial advice.
The borrower
| Item | Amount |
|---|---|
| Unsecured debts (cards, lines of credit, CRA, a payday loan) | $60,000 |
| Monthly available income, single | $3,900 |
| TFSA | $4,000 |
| Car | Worth $10,000, no loan, in Ontario (vehicle exemption $8,578) |
| Home | None |
Step 1: the bankruptcy benchmark
Surplus income. $3,900 − $2,716 (2026 standard for one person) = $1,184. 50% = $592 a month for 21 months = $12,432.
Non-exempt assets. TFSA $4,000 (not protected by BIA s. 67). Car equity above the exemption: $10,000 − $8,578 = about $1,422, which we round to $1,500 for simplicity. Total about $5,500.
Total receipts: $12,432 + $5,500 = $17,932. That is below the $15,000 property threshold for summary administration, because the threshold applies to property, not surplus income.
Trustee's fee (Rule 128): $975 + 35% × $1,025 + 50% × ($17,932 − $2,000) = $975 + $358.75 + $7,966 = $9,299.75.
Other costs: $100 disbursements + $170 counselling + $92.38 OSB filing fee (2026) = $362.38.
To creditors: $17,932 − $9,299.75 − $362.38 = $8,269.87, less the 5% levy = about $7,856, or about 13 cents per dollar.
Step 2: what different offers leave creditors
For a consumer proposal (Rule 129), fixed costs are $750 + $750 + $123.17 filing fee + $170 counselling = $1,793.17. The rest pays distributions D plus the 20% fee on D, so D = (total − $1,793.17) ÷ 1.2. Creditors then receive D less the 5% levy.
| Offer | Total paid | Distributions D | To creditors after levy | Cents per dollar of $60,000 |
|---|---|---|---|---|
| $250 × 60 | $15,000 | $11,006 | $10,455 | 17.4 |
| $300 × 60 | $18,000 | $13,506 | $12,830 | 21.4 |
| $350 × 60 | $21,000 | $16,006 | $15,205 | 25.3 |
| $400 × 60 | $24,000 | $18,506 | $17,580 | 29.3 |
Every row beats the bankruptcy benchmark of about $7,856. GST/HST on the fees lowers each figure a little. Run your own numbers with the cost split estimator.
Step 3: affordability
A proposal fails if you miss three monthly payments (BIA s. 66.31), so affordability matters more than squeezing the last dollar for creditors. Build a budget:
| Monthly | Amount |
|---|---|
| Available income | $3,900 |
| Rent, utilities, food, transport, insurance | $3,250 |
| Room for savings and irregular costs | $250 |
| Room for the proposal | $400 |
An offer of $300 leaves about $100 of extra margin. The trustee might suggest $300 for 60 months, or a higher payment over a shorter term.
Step 4: think like a creditor
Creditors and their agents look at:
- the bankruptcy comparison: is the offer clearly better?
- the term: money sooner is worth more; a 36-month proposal at a slightly higher monthly amount can be more attractive;
- your income stability: a reliable salary supports a higher offer than seasonal income;
- any lump sum: a lump sum from a family member or asset sale up front is attractive;
- large creditors: the CRA often holds a big share of claims and can call a meeting and vote;
- your history: recent cash advances or new debt before filing can make creditors push for more.
The CRA and some large banks have internal guidelines for what they accept; trustees know them, so ask what is realistic.
Lump-sum and hybrid offers
A proposal can be a lump sum: for example, a $12,000 payment funded by a relative. After $1,793.17 of fixed costs, D = $10,206.83 ÷ 1.2 = $8,505.69, and creditors get about $8,080 after the levy, slightly above the bankruptcy benchmark in this example. Lump sums are completed quickly, which shortens the time until the proposal comes off your credit report. Hybrid offers combine a lump sum with monthly payments.
If creditors ask for more
If creditors holding at least 25% of the proven claims request a meeting, they can vote on it, and the proposal can be amended at the meeting. A modest increase or shorter term is often enough. If it is rejected, you can make a new proposal or choose bankruptcy; the rejection does not automatically make you bankrupt. See consumer proposal rules.
Common mistakes
- Offering the highest amount you can possibly pay, leaving no room for a car repair or a month of reduced hours.
- Forgetting that the payment continues for up to five years.
- Ignoring the bankruptcy comparison: if a bankruptcy would cost you far less and you have no assets to protect, a proposal may not be worth it.
- Not telling the trustee about expected bonuses, inheritances or a partner's income.
Related: the bankruptcy benchmark depends on the surplus income calculation; if you can repay all principal, compare a debt management plan.
Frequently asked questions
Can I pay off a proposal early?
Yes. Paying the balance early completes the proposal sooner. The administrator's 20% share still applies to what is distributed.
Can I skip a payment if I have a bad month?
You can fall behind, but three missed monthly payments mean deemed annulment. Talk to the administrator about an amendment before that happens; see default and annulment.
Do I pay interest on the proposal?
No. Interest on included unsecured debts stops at filing, and the proposal amount is fixed.
What if my income rises during the proposal?
Unlike bankruptcy, the proposal amount does not change automatically. You pay what was agreed.
Sources
- Justice Laws Website — BIA ss. 66.11–66.31; General Rules, Rules 128–132
- Office of the Superintendent of Bankruptcy — consumer proposals and Directive 11R2-2026
- Ontario e-Laws — O. Reg. 657/05, vehicle exemption amount
