How much will a consumer proposal cost?

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When filing a consumer proposal in Canada, expect some costs: a $104.03 fee for the OSB, Licensed Insolvency Trustee fees—$750 initially and upon approval, plus 20% of the amount to creditors. Add two financial counseling sessions at about $170. These costs are bundled into your monthly payments over up to five years, ensuring no upfront costs. Reach out via phone, text, or live chat if you have any questions.

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Consumer Proposal Cost Question

How much will a consumer proposal cost? I’d like to know the typical costs involved in filing a consumer proposal so I can budget for it.

From: Anonymous Question
Location: Coquitlam, British Columbia (BC)
Category: consumer proposal

Consumer Proposal Cost Answer

When filing a consumer proposal, there are a few expenses to consider. First, there’s a mandatory filing fee to the Office of the Superintendent of Bankruptcy (OSB) of around $104.03. You’ll also need to budget for the fees of the Licensed Insolvency Trustee (LIT), which include an initial $750 plus sales tax at the time of filing, and the same fee once the proposal is approved. Additionally, 20% of the total amount distributed to creditors will be allocated to the trustee, along with sales taxes. On top of that, don’t forget the two financial counseling sessions costing roughly $170 plus sales taxes. But here’s the good news: these costs are all rolled into your monthly payments, spread over the course of your proposal, which can last up to five years.

For instance, if your proposal amount totals $30,000, after fees, about $21,120.77 will be distributed to creditors. The total you repay includes all these expenses, but remember, there are zero upfront costs. Everything is bundled into your fixed monthly payments. And at the end? You’ll receive a clear Statement of Receipts and Disbursements, breaking down every penny spent, giving you full transparency.

From: Insider Scott

Office of the Superintendent of Bankruptcy (OSB) Answer

The cost of a consumer proposal in Canada typically includes the following components:

1. Proposal Fee: This fee is generally determined by the Licensed Insolvency Trustee (LIT) managing the consumer proposal. It can range from a few hundred dollars to 20% of the total amount of the proposal. The exact fee should be disclosed upfront by the LIT.

2. Settlement Amount: This is the amount you agree to pay your creditors, which can be less than the total debt owed. This amount varies based on your financial situation.

3. Monthly Payment: The consumer proposal may require you to make monthly payments for a set duration, usually up to five years.

4. Administration Fees: These fees cover the costs involved in administering the proposal and are included in the proposal payments.

Referencing the Bankruptcy and Insolvency Act, section 66.25, the LIT must outline all costs associated with the filing of a consumer proposal, ensuring clarity in the financial obligations incurred by the debtor.

If you have additional questions regarding specific fees, it’s advisable to consult directly with a Licensed Insolvency Trustee.

From: OSB Helper

Related Questions to Fees For Consumer Proposal

Here are the top 5 most frequently asked questions related to the cost of a consumer proposal, based on common queries and concerns:

1. How are the fees for a consumer proposal calculated?

Fees include a $1,500 administration fee plus 20% of creditor distributions, a 5% levy on creditor distributions, and other minor fees such as filing fees and credit counselling sessions, all of which are included in your monthly payments[2][5].

2. Do I have to pay any fees upfront for a consumer proposal?

No, you do not pay any fees upfront; all fees are included in your negotiated monthly payments[2][4].

3. What is the typical monthly payment for a consumer proposal?

The monthly payment varies based on the total debt and the negotiated settlement, but a common example is around $167 per month for a $10,000 settlement over 60 months[2].

4. How do Licensed Insolvency Trustees get paid from a consumer proposal?

Licensed Insolvency Trustees are paid from the monthly payments you make, with their fees set by the government and included in the overall amount you negotiate with your creditors[2][5].

5. Are there any additional costs or interest charges in a consumer proposal?

No, there are no additional costs or interest charges; all fees and payments are fixed and included in your negotiated monthly payments[2][4].

If you have a question about debt see our debt questions or ask your own debt related question.

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