How much does a consumer proposal cost?

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Navigating consumer proposals in Canada can seem tricky, but it’s straightforward. Your earnings, assets, and debts influence costs. Payments align with your finances over up to 5 years. No upfront fees— Licensed Insolvency Trustees guide you, and fees are included. Get free, personalized advice tailored to your needs.

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Consumer Proposal Question

How much does a consumer proposal cost? If I decide to go with a consumer proposal, what fees or costs should I expect?

From: Anonymous Question
Location: Windsor, Ontario (ON)
Category: consumer proposal

Consumer Proposal Answer

Navigating the world of consumer proposals in Canada can feel a bit overwhelming, but let’s break it down simply. The cost hinges on a few key factors: your earnings, what you own, and how deep you’re in with creditors. Your monthly payments are crafted to match your financial situation, so they won’t break the bank. Typically, these payments are spread over a set period—often up to 5 years—ranging from a few hundred bucks to over a grand each month, depending on your unique setup.

Now, here’s a comforting thought: you won’t encounter any upfront fees. Payments kick in only after your proposal is officially greenlit. A LIT, or Licensed Insolvency Trustee, will help guide the process, and their fees are baked right into your regular payments. You even get a detailed rundown of all transactions once everything wraps up—talk about transparency!

To paint a picture: if you owe around $35,000, you might only need to fork out about $10,800, spread over three years at $300 each month. And don’t worry, those mandatory credit counselling sessions? Covered in your payments.

Lastly, since every province has its quirks (hello, taxes!), chatting with a licensed professional ensures you get the advice that’s right for you. They’ll offer a free, confidential peek into your best debt-busting options.

From: Insider Scott

Office of the Superintendent of Bankruptcy (OSB) Answer

A consumer proposal typically incurs two main types of costs: the fees associated with the Licensed Insolvency Trustee (LIT) and the payments to creditors.

1. LIT Fees: According to the Bankruptcy and Insolvency Act (RSC 1985, c 31 (2nd Supp), section 50.4), the LIT fees are regulated and based on the amount you propose to pay your creditors. The fees are generally a percentage of the total payments made in the proposal.

2. Payments to Creditors: The total amount that you would be proposing to pay your creditors is also a significant component of the overall cost. The specific amount will depend on your financial situation, but it must be sufficient to cover the creditors’ claims to some extent.

Additionally, under the regulations, you may also incur other minor costs such as disbursements for filing fees or administrative services related to your proposal.

In summary, the costs you should expect with a consumer proposal primarily include the LIT fees, which are performance-based, and the total amount you propose to pay to your creditors.

From: OSB Helper

Related Questions to Consumer Proposal Cost

Here are the top 5 most frequently asked questions related to the cost of a consumer proposal, based on common online searches and current trends:

1. How are consumer proposal fees determined?

Consumer proposal fees are federally regulated and included in your monthly payments[2][4].

2. Do I pay consumer proposal fees upfront?

No, you do not pay these fees upfront; they are included in your monthly payments over the term of the proposal[2][4].

3. What is the total cost of a consumer proposal?

The total cost includes the filing fee, trustee fees, and sales taxes, all of which are factored into your monthly payments[2][4].

4. How do consumer proposal fees affect my monthly payments?

The fees are included in your agreed monthly payments, and your creditors essentially cover the cost of the proposal through these payments[1][2].

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

No, there are no additional costs beyond what is included in your negotiated monthly payments[1][2][4].

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

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