Ask a Licensed Insolvency Trustee! Award-winning BC Licensed Insolvency Trustees Sands & Associates answers questions about debt help, including personal bankruptcy and Consumer Proposals.
Q: How much does it cost to file a Consumer Proposal?
A: The fees of the Licensed Insolvency Trustee who files the Consumer Proposal are set by federal law and government tariff. These fees include all the costs for:
- The government’s fee to formalize the Consumer Proposal in Canada;
- Two financial counselling sessions done as part of the Consumer Proposal.
Because the Licensed Insolvency Trustee’s fees are set by tariff, you will not be billed or ‘invoiced’ – these fees are simply paid out of the money creditors receive under the Consumer Proposal and no additional cost is paid by the person who is making the Consumer Proposal.
In simple terms: You do not need to pay what you are offering to your creditors plus a fee – everything is included in one simple monthly payment.
Generally if you are making a Consumer Proposal, you will only pay your first monthly proposal payment when you sign the official Consumer Proposal documents. The settlement amount offered to creditors will be based on several factors, including your income and overall debt.
Example: Your Consumer Proposal to settle total consolidated debts of $35,000 offers your creditors $10,800 total, which you will pay by monthly payments of $300 for 36 months. You would then pay:
- $300 within 30 days of signing and filing your official Consumer Proposal
- No payments are required in advance of the filing – there are zero “up front” fees.
- $300 per month, for 35 months
In the scenario above, you would only have to repay around 30% of the debt and the interest charges or penalties from your creditors will stop immediately upon filing.
All you would need to pay is what you are offering to your creditors – costs of administration, and the Licensed Insolvency Trustee fee are essentially paid by your creditors.
At the end of your Consumer Proposal you will receive a final accounting called a Statement of Receipts and Disbursements. This official document helps to provide full transparency and will detail all payments made through the Consumer Proposal and show a clear breakdown of the legal tariffs that were used to determine the Trustee’s fees and the government’s levy (charge). The Statement of Receipts and Disbursements will also detail the creditors that received debt settlement payments (called dividends) through the Consumer Proposal, and exactly how much each creditor received.
In Canada only a Licensed Insolvency Trustee can file a Consumer Proposal and no referral is required. Confidential consultations regarding Consumer Proposals and other debt solutions are free of charge, with no required commitment to sign.
Find out how a Consumer Proposal could work for you, book your free confidential debt consultation with Sands & Associates today. We have a network of local BC offices to serve you online and in-person.