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TaxDebtResolution
Free · CRA

Consumer Proposal vs Bankruptcy Evaluator

Enter your CRA and other unsecured debts and what you could offer each month. See the share you'd repay, what would be released, and whether the CRA's vote could decide the outcome.

In short: What is a consumer proposal?

A formal, legally binding offer to your creditors, made through a Licensed Insolvency Trustee, to pay a percentage of what you owe, take longer to pay, or both. It can't last more than five years.

Last reviewed against 2 official sources.

Try an example:

Your debts

Exclude the mortgage on your home

Your offer

Your proposal repays

40%

$30,000 of $75,000 over 60 months

Released if you complete it
$45,000
CRA's share of claims
40%
Beats bankruptcy for creditors?
Yes
  • The CRA holds 40% of your claims, enough to request a creditors' meeting on its own; at a meeting, more than 50% by value must vote yes.

Only a Licensed Insolvency Trustee can file a consumer proposal. Filing stops wage garnishment and most lawsuits. Missing three monthly payments annuls it.

Your offer against your debts

Creditors would receive about 40% of what you owe.

Paid against forgiven

About $45,000 would be forgiven if the proposal is accepted.

The link holds your numbers in the address. Nothing is sent to us.

How a proposal is judged

  1. Eligibility: total debts up to $250,000 excluding your home mortgage.
  2. The offer: what you can pay over up to 5 years.
  3. Creditors' view: they compare it with what they'd get in a bankruptcy. A creditor with 25% of claims can call a meeting; more than 50% by value decides it.

Worked example

Alex owes the CRA C$30,000 and has C$45,000 of other unsecured debt. Offering C$500 a month for 60 months repays C$30,000, 40%, and C$45,000 would be released on completion. The CRA holds 40% of the claims, so it can ask for a meeting, but it can't decide the vote alone.

Limits

  • Which assets you'd keep in a bankruptcy depends on provincial exemptions. A trustee will value them.
  • Trustee fees and how creditors are paid are set by law and aren't modelled.

Reading the charts

Each chart redraws as you change the inputs and uses the same calculation as the result above. Choose "Show data" for the exact figures as a table, or download them as a CSV. "Copy link" saves your numbers in the page address so you can come back to the result or share it; nothing is sent to us.

Official sources

Figures last reviewed .

Frequently asked questions

What is a consumer proposal?

A formal, legally binding offer to your creditors, made through a Licensed Insolvency Trustee, to pay a percentage of what you owe, take longer to pay, or both. It can't last more than five years.

Who can make one?

Individuals whose total debts, not counting a mortgage on their home, don't exceed $250,000, according to the Office of the Superintendent of Bankruptcy. Confirm the current limit with a trustee.

Can a consumer proposal include CRA tax debt?

Yes, CRA debts are unsecured claims in a proposal. Because the CRA is often a large creditor, its vote can matter a lot if a creditors' meeting is held.

How do creditors accept it?

They have 45 days. A meeting is held only if creditors owed at least 25% of the proven claims ask for one; otherwise the proposal is deemed accepted. At a meeting it passes with more than 50% of the dollar value of votes.

What happens when I file?

You stop paying unsecured creditors directly, and wage garnishments and lawsuits are stopped. You make payments to the trustee and attend two counselling sessions.

What if I miss payments?

If you're paying monthly and miss three payments, the proposal is deemed annulled and creditors can start collecting again.

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Disclaimer: This tool gives a general estimate based on what you enter and the published rules. It is not tax, legal or financial advice, and the tax authority makes the final decision. Speak to a qualified professional before acting. See our disclaimer.