Compare clearing unsecured debt at its current interest rate with a credit counselling debt management plan at a reduced rate over the same period.
Use this calculator to test a debt management plan (DMP) offered by a non-profit credit counselling agency. In a DMP you repay the full principal of your unsecured debts, usually within about five years, and the counsellor asks creditors to reduce or waive interest. Creditors do not have to agree, and a DMP is not a legal process under the Bankruptcy and Insolvency Act.
How it works. The tool calculates the level monthly payment that clears the balance over the period at today's average rate, and the payment at the rate the creditors accept in the plan. The difference times the number of months, less the agency's fees, is the saving.
Worked example (illustrative). $18,000 of card and loan debt at an average 19.99% would need about $476.79 a month to clear in 5 years, about $10,607 of interest. In a DMP at 0% the payment is $18,000 ÷ 60 = $300.00. The difference is $176.79 a month; after $600 of illustrative agency fees the saving is about $10,007, and the fees are recovered in about 4 months.
Limits. Fees vary by agency and province; ask for them in writing. If the $300 payment is still not affordable, a consumer proposal may reduce the principal itself. The defaults are not quotes.
Pitfalls, Failed Plans and Official Sources
Equifax and TransUnion retention periods for consumer proposals, bankruptcies and debt management plans by province according to the FCAC, with worked timelines and rebuilding steps.
Calculations and Checklists
How a non-profit credit counselling debt management plan compares with a consumer proposal in Canada, with a worked $30,000 example, credit report effects and who each suits.
Calculations and Checklists
An illustrative Ontario borrower with $42,000 of unsecured debt compared across repaying, a debt management plan, a consumer proposal and bankruptcy, using 2026 rules.
Pitfalls, Failed Plans and Official Sources
How Orderly Payment of Debts under Part X of the Bankruptcy and Insolvency Act works, which provinces offer it, which debts qualify and how it compares with a DMP or consumer proposal.
