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 $55,000 offers your creditors $23,400 total, which you will pay by monthly payments of $650 for 36 months. You would then pay:
- $650 at the time you sign and file your official Consumer Proposal
- $650 per month, for 35 months
In the scenario above, you would only have to repay around 40% 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.
In Canada only a Licensed Insolvency Trustee can file a Consumer Proposal and no referral is required. Confidential consultations regarding Consumer Proposals and other applicable debt solutions are free of charge, with no required commitment to sign.