How Much Does A Consumer Proposal Cost?

How Much Does It Cost to File a Consumer Debt Proposal?

Debt relief is available in many different forms.

One of the most popular ways of solving your debt problem comes in the form of a consumer proposal.

Essentially, you can think of this as an agreement between you and your creditors.

You propose a settlement, and they agree to it.

The only way to get a consumer proposal is to go through a Licensed Insolvency Trustee, who will handle all the negotiations.

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Creditors have to agree to your proposal before it can go ahead.

If successful, you can make significant savings and be debt-free a lot faster.

However, one of the main sticking points of consumer proposals is the cost.

How much does a consumer proposal cost?

The issues for both creditors and debtors are different.

As the debtor, you want to make the consumer proposal as affordable as possible.

Otherwise, what’s the point?

The whole reason you’re going through this process is to make your debt more manageable.

So, it must suit your financial situation.

As the creditor, they want to receive as much money as possible.

They’re hardly going to agree to a proposal that sees them walk away with barely any of the cash you owe.

As a general rule, creditors will only agree to consumer proposals if they get more money than they would if you filed for bankruptcy.

What tends to determine the cost of a consumer proposal?

Obviously, each situation is different. You may end up paying more for your consumer proposal than someone else.

Typically, we identify these key factors as the things that determine the overall costs:


  • How much money you earn – this is your income plus any surplus income;
  • The value of any assets you own – if you have assets that would be handed over in a bankruptcy, then you need to work out how much they’re worth;
  • Your creditors.


The last factor might be the most significant as some creditors are more demanding than others.

You will find some that agree to very low costs at under 30% of what you originally owe.

Similarly, you have some who demand close to the original debt, or they will refuse your proposal entirely.

How do you negotiate your consumer proposal costs?

As mentioned before, you need a Licensed Insolvency Trustee to help you draw up this proposal.

Still, the negotiations are between you and your creditors.

The LIT acts as a go-between to help you find the ideal price where both parties are satisfied.

They will also provide a full assessment of your financial situation to figure out how much you can conceivably afford.

How do you pay for your consumer proposal?

Once you have negotiated the amount payable, you can make payments monthly over an agreed timeframe.

A huge benefit of consumer proposals is that you could spread the costs over up to 5 years, with no interest stacked on top.

If your circumstances change, you can make early payments to wipe chunks from the amount owed.

Or, you could pay it all off in a lump sum if you’d rather do that.

Similarly, if your financial situation worsens, then you can defer up to two payments.

This gives you some wiggle room if you are going through a bad patch.

However, if a third payment is missed, then the credit proposal is made null and void.

Consequently, your full debt returns to you, and you’re at the mercy of your creditors once more.

Your LIT could try and renegotiate a new deal with the creditors, but this has to be accepted by them.

The chances are they will be less inclined to accept them, so be sure you never miss a third payment.

Do you have to pay your Licensed Insolvency Trustee for their services?

The LIT will provide an administration service throughout this whole process.

As such, you will have to make one monthly payment.

That’s all there is, and that’s all you will ever need to pay for the services.

How is this payment judged?

It’s simple; it depends on your agreed proposal with the creditors.

Let’s say you both accept a proposal that stipulates you pay $200 a month to the creditor.

This is how much you will pay your LIT in the one-off payment.

Need help with Consumer Proposals?

If you’re interested in filing a consumer proposal in Canada, then we can help you out.

We don’t charge any extra fees on top of your one-off monthly payment.

Give us a call, and we can set up a consultation to review your situation.

Alternatively, fill in one of our online evaluation forms, and we will get back to you ASAP.

Information on Consumer Proposals

Consumer Proposals in Canada – An Alternative to Bankruptcy
What is a Consumer Proposal?
What are the Benefits of a Consumer Proposal?
What are the Steps in a Proposal?
What Debts Are Erased in a Consumer Proposal?
Is There Life After a Proposal?
Consumer Proposal Eligibility
How to Amend a Consumer Proposal

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