Consumer Proposal Fees: What LITs Actually Charge in 2026

Consumer proposal fees in Canada are set by federal law under the Bankruptcy and Insolvency Act and are identical across all Licensed Insolvency Trustees. You pay $1,500 in base LIT fees—$750 on filing, $750 on approval—plus 20% of the funds distributed to your creditors. Add $170 for two mandatory counselling sessions and a $100 government filing fee. These costs come out of your monthly proposal payments, not on top of them. You pay nothing upfront and nothing extra. In 2025, 127,000 Canadians filed consumer proposals with a 97% creditor approval rate. For a typical $30,000 debt settled at 30%—$9,000 total—your all-in cost including fees is $9,000 spread over 3-5 years at roughly $150-$250/month.

How Consumer Proposal Fees Are Calculated

The Bankruptcy and Insolvency Act Section 66.12 tariff structure controls every dollar a Licensed Insolvency Trustee can charge. No trustee can add fees, discount fees, or negotiate fees. Here’s the exact breakdown.

Base LIT fees:

• $750 when you file your consumer proposal with the Office of Superintendent of Bankruptcy
• $750 when creditors approve your proposal (typically 45 days after filing)
• Total base fee: $1,500 regardless of your debt amount

Distribution fees:

• 20% of all funds distributed to your creditors
• Example: You offer $10,000 to creditors over 60 months. After the $1,500 base fee, $8,500 remains. The LIT takes 20% of that: $1,700. Creditors receive $6,800.

Mandatory counselling:

• $85 per session × 2 sessions = $170 total
• Required to complete your proposal and get your certificate

Government filing fee:

• $100 paid to Office of Superintendent of Bankruptcy at filing
• Covers processing and registration of your proposal

Office of Superintendent of Bankruptcy levy:

• 5% of creditor distributions goes to OSB for regulatory oversight
• Automatically deducted from creditor payments

Sales tax:

• GST or HST applies to all LIT fees and counselling
• Rate depends on province: 5% (Alberta, BC, Saskatchewan), 13% (Ontario), 15% (Atlantic provinces)
• Quebec residents pay 14.975% combined QST + GST—highest rate in Canada

Run the numbers on $30,000 debt settled at $9,000 over 60 months in Ontario. Base LIT fee: $1,500. After base fee: $7,500 remains. Total LIT fees run $2,800-$3,200 with tax. Creditors get $5,700-$6,100. Your monthly payment: $150.

See your actual numbers: Use our free Consumer Proposal Calculator to estimate your monthly payment and total debt reduction based on your specific situation.

Every month you delay filing costs you interest. At 21% APR on $30,000 credit card debt, you pay $525/month in interest that doesn’t reduce your balance. File today and that interest stops immediately. One month of delay = $525 you’ll never recover.

Who Pays the Trustee in a Consumer Proposal

You pay nothing upfront—one of the key advantages of a consumer proposal. Not a dollar. The LIT draws all fees from your proposal payments held in trust. You never write a separate check to the trustee.

When you make your $200 monthly payment, it goes into a trust account the LIT controls. The LIT pays themselves first per the tariff. Then they distribute remaining funds to creditors quarterly or semi-annually. Your creditors effectively pay the LIT fees by accepting reduced repayment.

Here’s how it flows. You owe $40,000. You offer $14,000 over 60 months at $233/month. Those payments accumulate in trust. The LIT takes the $1,500 base fee first. Then 20% of remaining distributions. Creditors receive what’s left—roughly $11,200 or 28% of your original debt.

Compare that to debt settlement companies. They charge 20-25% of your enrolled debt upfront or throughout the program—regardless of whether settlements succeed. On $40,000 debt, you’d pay $8,000-$10,000 just in fees. And you’d still owe creditors the settled amounts.

Or credit counselling debt management plans. In Ontario, agencies charge $50 setup plus 15% of each payment. On a $400/month DMP, you pay $60/month in fees—$720/year—for five years. That’s $3,600 in fees to pay back 100% of your debt with interest.

Consumer proposals cost less because creditors accept the hit. Your $14,000 proposal payment includes all fees. Creditors get $11,200 instead of $0 in bankruptcy. The LIT gets paid for administering the legal process. You get debt relief for one flat monthly amount with zero surprises.

If you default on your consumer proposal by missing three consecutive payments, the proposal annuls automatically. You’ve paid nothing extra out of pocket—just your proposal payments up to that point. Debt settlement programs leave you out thousands in fees even if deals collapse.

Get your debt relief options in 60 seconds — our calculator shows exact costs for consumer proposal, bankruptcy, and debt consolidation based on your debt and income. Then find a Licensed Insolvency Trustee for a free consultation.

Consumer Proposal Cost Breakdown: Real Numbers for $10K-$50K Debt

Your total cost depends on what creditors will accept and how long you take to pay. Most proposals offer 20-40% of total debt over 36-60 months. Here’s what real Canadians pay.

$10,000 debt scenario:

• Proposal offer: $3,000 over 36 months
• Monthly payment: $83
• LIT fees: $1,500 base + 20% of remaining distributions = ~$1,800 total
• Creditors receive: ~$1,100 (11% of original debt)
• Total you pay: $3,000 all-in

$30,000 debt scenario:

• Proposal offer: $10,000 over 60 months
• Monthly payment: $166
• LIT fees: $1,500 base + 20% of distributions = ~$3,200
• Creditors receive: ~$6,300 (21% of original debt)
• OSB levy: ~$500
• Total you pay: $10,000 all-in

$50,000 debt scenario:

• Proposal offer: $18,000 over 60 months
• Monthly payment: $300
• LIT fees: $1,500 base + 20% of distributions = ~$4,800
• Creditors receive: ~$12,700 (25% of original debt)
• OSB levy: ~$825
• Total you pay: $18,000 all-in

Payments start 30-90 days after filing—see the consumer proposal timeline for the full schedule. You make your first payment when the proposal specifies—usually month two. Interest stops the day you file. Not when creditors approve. Not when you make your first payment. Filing date.

Calculate what you’re losing right now. Credit card debt at 21% APR costs you $1.75/day per $1,000 owed. $30,000 debt = $52.50/day in interest. That’s $1,575/month going nowhere. File a consumer proposal and that bleed stops immediately.

Compare to minimum payments. $30,000 at 21% APR with 3% minimum payments takes 47 years to pay off. Total interest: $89,000. You pay $119,000 to clear $30,000 debt. A consumer proposal clears that same debt for $10,000 in five years.

You can pay your proposal faster than agreed with no penalty. Creditors already voted yes to the terms. Pay $300/month instead of $166 and finish in 33 months instead of 60. The LIT still takes their 20% of distributions, so you save by reducing what goes to creditors, not by cutting LIT fees.

Consumer Proposal Fees vs Bankruptcy vs Debt Settlement

Different debt relief options charge wildly different amounts for similar outcomes. Compare the true cost of clearing $30,000 debt:

Bankruptcy looks cheaper on paper until you factor surplus income. The 2025 threshold is $2,355/month for a single person. Earn more and you pay 50% of the surplus for 21 months.

Example: You earn $3,500/month net. Surplus: $3,500 - $2,355 = $1,145/month. You pay 50% = $572.50/month for 21 months. Total surplus payments: $12,022.50. Add the $2,700 base bankruptcy cost. Grand total: $14,722.50.

That same income in a consumer proposal? You’d negotiate based on disposable income after reasonable living expenses. Offer $250/month for 60 months = $15,000 total to settle $30,000 debt. Creditors often accept because it’s more than bankruptcy would yield.

Debt settlement companies charge fees whether settlements succeed or fail. They negotiate with creditors who have zero legal obligation to accept. Meanwhile, creditors can sue you, garnish wages, and add interest. You’re paying fees to gamble with no court protection.

Credit counselling debt management plans cost you 100% of your debt plus 15% in admin fees. On $30,000 debt, you pay $34,500 over five years. Interest usually drops to 0-10%, but you’re still repaying every dollar. Compare to a consumer proposal where you pay $10,000 and walk away legally clear.

Consumer proposals have a 97% creditor approval rate when filed by Licensed Insolvency Trustees. Creditors vote based on dollars, not emotion. If your offer beats what they’d get in bankruptcy—which pays roughly $0.07-$0.15 per dollar—they vote yes.

Stop collection calls today — book a free consultation with a Licensed Insolvency Trustee and get your exact consumer proposal cost in one meeting. Zero obligation.

Are LIT Fees Negotiable? (They’re Not—Here’s Why That Protects You)

No Licensed Insolvency Trustee in Canada can charge more or less than the Bankruptcy and Insolvency Act tariff. Fees are federally regulated and identical across all trustees, provinces, and debt amounts.

The Office of Superintendent of Bankruptcy licenses and audits all LITs. Every consumer proposal filed gets reviewed for compliance before creditors vote. If a trustee charges non-tariff fees or offers discounts, they risk losing their license.

This protects you from predatory pricing. You can’t get upsold. You can’t get charged hidden fees because your case is “complex.” A $10,000 debt in Halifax costs the same in LIT fees as a $50,000 debt in Vancouver—percentage-wise, the fee is baked into the same tariff.

Compare to debt settlement companies. They set their own fees with zero regulation. Some charge 20% upfront. Others charge 25% spread over 36 months. Others charge per settled account. You’re negotiating blind with no standard.

Or bankruptcy trustees (who are also LITs). Same tariff applies. Bankruptcy costs $1,800 base plus $75/month for nine months in surplus income reporting—total $2,475 minimum. Plus surplus income payments if you earn over threshold. No trustee can undercut that.

Shopping for a cheaper LIT is pointless. Focus instead on:

• Experience with your debt type: CRA tax debt proposals need trustees who understand CRA’s settlement patterns
• Local availability: You’ll meet face-to-face at least twice for counselling
• Service quality: Responsiveness, clear explanations, hand-holding through the 45-day creditor vote
• Track record: Approval rates above 95%, years in practice, OSB complaint history

Licensed Insolvency Trustees serve both you and your creditors. They have a fiduciary duty to remain neutral. They’re not salespeople. They can’t earn more by steering you toward bankruptcy over a proposal or vice versa. Their fee is the same either way.

Any trustee offering discounted fees is breaking federal law. Any trustee charging extra for “rush processing” or “complex cases” is violating the tariff. Walk away and report them to the OSB.

The standardized fee structure means you’re comparing apples to apples. The real question isn’t “How much?” but “Will creditors accept my offer?” A good LIT answers that in your free consultation by running the numbers and predicting creditor response based on 100+ past proposals.

Consumer Proposal Administration Fees: Every Cost Explained

You’ve found the catch section. There is no catch. Here’s every single fee down to the penny so you can calculate your all-in cost.

Government filing fee:

• $100 paid to Office of Superintendent of Bankruptcy when your proposal is filed
• Non-refundable even if creditors reject the proposal

Mandatory counselling sessions:

• $85 per session × 2 sessions = $170 total
• First session covers budgeting and money management
• Second session covers credit rebuilding and financial planning
• You must complete both to receive your Certificate of Full Performance

GST/HST on LIT fees and counselling:

• Applied to the $1,500 base LIT fee, 20% distribution fees, and $170 counselling
• Rate by province: 5% GST (Alberta, BC, Saskatchewan, Manitoba), 13% HST (Ontario), 15% HST (Nova Scotia, New Brunswick, Newfoundland, PEI)
• Quebec residents pay 14.975% combined QST + GST on LIT fees
• Example: $1,500 LIT fee + $170 counselling = $1,670. In Ontario: $1,670 × 13% = $217.10 HST. Total: $1,887.10

Office of Superintendent of Bankruptcy levy:

• 5% of all creditor distributions
• Automatically deducted by LIT before paying creditors
• Funds OSB regulatory oversight of bankruptcy and insolvency system

Optional disbursements (rare, must be disclosed upfront):

• Credit report fees: $20-$50 if LIT pulls reports on your behalf
• Personal Property Security Registry searches: $20-$40 to check for secured creditors
• Tax return preparation: $50-$200 per year if LIT prepares your returns during proposal

Most LITs include credit reports and registry searches in their base fee. Ask during your free consultation if any disbursements apply. If they won’t answer clearly, find another trustee.

Calculate your true all-in cost for a $30,000 debt proposal offering $10,000 over 60 months in Ontario:

• Monthly payment: $166 × 60 = $9,960
• HST (13% on LIT fees and counselling): ~$420
• Government filing fee: $100
• Grand total paid by you: $10,480

That’s every dollar. No surprise fees at month 12. No “account maintenance charges” at month 24. No “completion fees” when you make your last payment.

Compare to debt settlement. You pay 20-25% in fees. Then you pay settled amounts to creditors. Then you pay taxes on forgiven debt over $600. A $30,000 debt might cost $6,000 in fees, $15,000 in settlements, and $1,500 in taxes on the $9,000 forgiven—$22,500 total.

Or compare to letting debt ride. $30,000 at 21% APR with 3% minimum payments costs you $89,000 in interest over 47 years. Your all-in cost: $119,000. A consumer proposal clears it for $10,480.

How Much Does a Consumer Proposal Cost? 3 Real Examples

Aisha, 29, Mississauga, Ontario — $18,000 debt

Aisha worked retail management earning $3,200/month gross. She carried $12,000 across three credit cards at 19.99-24.99% interest and a $6,000 line of credit at 12% interest. Minimum payments totaled $680/month. She couldn’t keep up.

Her Licensed Insolvency Trustee proposed $6,000 over 48 months at $125/month. Creditors voted 100% in favor—they’d get 33% of debt compared to roughly 10% in bankruptcy.

Fee breakdown:

• Base LIT fee: $1,500
• Distribution fee: 20% of $4,500 remaining = $900
• Counselling: $170
• HST (13%): $334
• Government filing: $100
• OSB levy: $225

Creditors received: $3,171 (17.6% of original $18,000 debt)

Total Aisha paid: $6,000 over four years

Credit impact: R7 rating on credit report until completion in 2030, then drops off entirely by 2033.

Aisha’s alternative was bankruptcy. She earned $3,200 gross ($2,650 net after taxes). Surplus income threshold: $2,355. Surplus: $295/month. She’d pay 50% = $147.50/month for 21 months = $3,097.50 plus $2,700 base bankruptcy cost. Total: $5,797.50 in only 21 months—higher monthly payments, worse credit damage (R9 vs R7), and asset risk (bankruptcy trustee can seize non-exempt assets).

She chose the consumer proposal. Finished in 48 months. Now rebuilding credit with a secured card.

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James, 44, Calgary, Alberta — $47,000 debt

James drove long-haul truck earning $5,800/month gross. He owed $28,000 across five credit cards (19-23% interest), $12,000 to CRA for 2023-2024 unpaid taxes (interest at 10% compounded daily), and $7,000 in payday loans (347% APR before he stopped paying).

Collection agencies called daily. CRA threatened wage garnishment. He couldn’t afford the $1,800/month minimum payments.

His LIT proposed $15,000 over 60 months at $250/month. CRA typically demands 30-40% in proposals. James offered 31.9%. Creditors voted yes.

Fee breakdown:

• Base LIT fee: $1,500
• Distribution fee: 20% of $13,500 remaining = $2,700
• Counselling: $170
• GST (5%): $218.50
• Government filing: $100
• OSB levy: $675

Creditors received: $10,136.50 (21.6% of original $47,000 debt)

Total James paid: $15,000 over five years

Credit impact: R7 rating until 2031, clears by 2034.

James’s bankruptcy alternative would’ve cost him dearly. Net income: $4,900/month. Surplus: $2,545. He’d pay 50% = $1,272.50/month for 21 months = $26,722.50 plus $2,700 base. Total: $29,422.50. Double the cost in half the time.

CRA debt complicates bankruptcy because the trustee must obtain clearance certificates. CRA often opposes discharge until taxes are paid. Consumer proposals treat CRA as an unsecured creditor—they vote like everyone else. James’s proposal passed with 87% creditor approval.

He’s 24 months into his proposal. His credit score jumped from 510 to 620 within 18 months because the R7 rating is better than the R9s and collection accounts he carried before filing.

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Danielle, 36, Fredericton, New Brunswick — $9,500 debt

Danielle worked as a medical receptionist earning $2,800/month. She had $6,000 on one Visa card at 21.99% and $3,500 in store financing (Brick, Leon’s) at 29.99%. Minimum payments: $385/month. She fell behind after a car repair.

Her LIT proposed $3,500 over 36 months at $97/month. Low creditor recovery—only 36.8%—but still better than bankruptcy where they’d get near-zero.

Fee breakdown:

• Base LIT fee: $1,500
• Distribution fee: 20% of $2,000 remaining = $400
• Counselling: $170
• HST (15%): $310.50
• Government filing: $100
• OSB levy: $100

Creditors received: $1,419.50 (14.9% of original $9,500 debt)

Total Danielle paid: $3,500 over three years

Credit impact: R7 rating until 2029, clears by 2032.

Danielle’s creditors accepted because her income was too low for bankruptcy surplus payments, and she had no assets. They’d receive nothing in bankruptcy after trustee fees. The proposal gave them something.

Her interest charges before filing: $6,000 × 21.99% = $1,319/year. $3,500 × 29.99% = $1,050/year. She was paying $2,369/year just in interest—$197/month that didn’t touch principal. The consumer proposal stopped that bleed immediately.

She finished payments in December 2028. Her credit score is now 580, up from 490 at filing. She’s applying for an apartment that accepts R7 ratings in credit checks.

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All three scenarios share one pattern: creditors accepted lower recovery because the alternative was worse. Consumer proposals work because they balance debtor relief with creditor recovery better than bankruptcy.

Book your free consultation now — find out what creditors will accept for your specific debt mix. First meeting is free, no obligation, completely confidential.

What Happens If You Can’t Afford the Monthly Payment

You’re drowning. You can’t make next month’s payment. Here’s what happens if you miss three in a row: your consumer proposal annuls automatically. No warning. No grace period. Creditors regain the legal right to sue, garnish wages, and add interest from the annulment date.

The Bankruptcy and Insolvency Act Section 66.31 gives you a two-payment buffer. Miss one payment—you’re fine. Miss two—you’re on thin ice. Miss three—your proposal dies.

Consequences of annulment:

• All debt reverts to original amounts minus whatever you’ve paid toward creditors
• Interest restarts at original rates from annulment date
• Creditors can garnish up to 50% of net wages in some provinces (30% federal limit, but provincial laws vary)
• Collection calls and letters restart immediately
• Credit report shows annulled proposal (R7 remains until three years after annulment date)

What you’ve already paid:

• LIT fees are non-refundable—they earned them by filing and administering your proposal
• Creditor distributions already made stay with creditors—they don’t refund money if you default
• Example: You paid $5,000 over 24 months. LIT took $1,500 in fees. Creditors got $3,200. You default. Creditors now claim original $30,000 minus $3,200 = $26,800 plus two years of interest at 21% = ~$37,000 total

Amendment option (rare, requires creditor consent):

• You can request a modification to reduce monthly payments or extend the term
• Requires sending a proposal amendment to all creditors and holding a vote
• Creditors rarely approve amendments unless you have a documented hardship (job loss, medical emergency, disability)
• If amendment fails, your original proposal continues until you default

Real-world example: You filed a consumer proposal for $30,000 debt at $200/month for 60 months. You paid faithfully for 30 months—$6,000 total. Then you lost your job. You missed month 31, month 32, month 33. Annulled.

Your position:

• You paid $6,000 total
• LIT took $1,500 + distribution fees (~$1,200) = $2,700
• Creditors received $3,000
• You still owe $30,000 - $3,000 = $27,000
• Plus 30 months of interest at 21% compounded = $8,505
• Total owed: $35,505

CRA can garnish wages without court approval after 90 days. They’ll take 30-50% of your net pay depending on family size. Credit card companies need a court judgment first—add 6-12 months. But once they win judgment, they can garnish 30% of wages federally (50% in some provinces if provincial law governs).

Smarter moves if you can’t afford payments:

• Call your LIT immediately when you see trouble coming—don’t wait for missed payments
• Ask about temporary payment deferral (LIT can hold payments in trust for 2-3 months while you job hunt)
• Request an amendment before you default (slim chance, but better than annulment)
• Consider bankruptcy if your financial situation permanently tanked—you can file bankruptcy after annulment, but you’ll have wasted time and money

Paying early (no penalty): You can pay your consumer proposal faster than agreed with zero penalty. Creditors already voted yes to the terms. If you get a bonus, tax refund, or new job, throw extra money at the proposal.

Example: You agreed to $200/month for 60 months. You get a $5,000 tax refund. You make a lump payment. The LIT still takes 20% of distributions, so creditors get $4,000 instead of $5,000. But you’re done years early. Credit rating clears sooner. You’re debt-free faster.

The key: talk to your LIT before you miss payments. They can’t change the rules, but they can explain your options and timeline to default. Silence is the worst strategy. Miss three payments without warning and your proposal annuls with zero recourse.

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Consumer proposal fees are the most transparent in Canadian debt relief. You know every dollar going where before you sign. No surprises. No hidden charges. No variable fees.

The BIA tariff protects you from predatory pricing and ensures every Canadian pays identical fees regardless of location, trustee, or debt complexity. LITs get the second $750 and distribution fee only if your proposal succeeds. This incentivizes them to secure creditor approval.

Compare total costs. A $30,000 consumer proposal costs $9,000-$12,000 over five years at $150-$200/month. Bankruptcy costs $2,700 minimum but hits $15,000+ with surplus income. Debt settlement charges $6,000-$7,500 upfront with no legal protection. Credit counselling costs $34,500 to repay 100% of debt.

Every month you wait costs you interest. $30,000 at 21% APR burns $525/month—$6,300/year—without touching principal. File a consumer proposal and interest stops the day your LIT submits Form 47 to the Office of Superintendent of Bankruptcy.

You’re choosing between years of minimum payments that go nowhere or five years of fixed payments that clear your debt legally. The math is simple. The choice is binary. Keep bleeding interest or stop it today.

Get your exact consumer proposal cost in 60 seconds — our calculator uses your debt and income to estimate your offer, monthly payment, and total cost. Then book a free consultation with a Licensed Insolvency Trustee near you. Zero cost, zero obligation, complete confidentiality.