Consumer Proposals June 24, 2026 · Updated June 24, 2026

Licensed Insolvency Trustee Fees in Canada: What You Actually Pay

Q: How much does a Licensed Insolvency Trustee charge for a consumer proposal in Canada?

LIT fees for consumer proposals are built into the total payment — you do not pay anything separate from your proposal amount. The Bankruptcy and Insolvency Act (BIA) and OSB Directive 11R4 set the framework: the LIT retains approximately 20% of each payment received as their administrator's fee, and 5% goes to the Office of the Superintendent of Bankruptcy (OSB) as the Superintendent's levy. If you offer $15,000 over 60 months ($250/month), roughly $11,250–$12,750 of that amount reaches creditors after fees. The total you pay is what you negotiated with your creditors — no additional fees on top.

Q: How much does bankruptcy cost in Canada?

First-time bankruptcy costs a minimum of $1,800–$2,500 in Canada, which covers the trustee's base fees, two mandatory counselling sessions ($85/session), and filing costs. If your net monthly income exceeds the surplus income threshold (2026: $2,355 for a single person, $2,934 for a couple), you pay 50% of the excess to the trustee for 21 months. For example, earning $4,000/month net as a single person means $1,645 above threshold × 50% = $823/month × 21 months = $17,283 in surplus income payments, plus the base fee.

Q: Is the first LIT consultation free in Canada?

Yes. Licensed Insolvency Trustees are required to provide an initial consultation at no charge. The OSB enforces this through the Code of Ethics for Trustees. Any LIT who charges for an initial assessment is violating the Code. You can meet with multiple LITs at no cost before choosing who to file with.

Q: Can I negotiate LIT fees in Canada?

Not directly. The LIT's share of consumer proposal payments is governed by BIA Tariff regulations and OSB Directive 11R4 — these are federal rules, not negotiable per-LIT. What you can negotiate is the total proposal amount (what you offer creditors). A lower total proposal payment means less in absolute dollars — including the LIT's fee. The LIT's percentage stays the same; the absolute dollar amount scales with what you propose.

Q: What is the Superintendent's levy on a consumer proposal?

The Superintendent's levy is a 5% charge on all funds distributed in a consumer proposal. It is collected by the Office of the Superintendent of Bankruptcy (OSB) to fund insolvency regulation in Canada. The levy is deducted from proposal payments before distribution to creditors — it is not an additional charge on top of your proposal. On a $15,000 proposal, the levy is $750.

LIT fees in Canada are set by the BIA and OSB. Consumer proposals: fees built into payments (~20% LIT + 5% levy). Bankruptcy: $1,800–$2,500 minimum plus surplus income.

Marcus Chen · Debt Relief Expert & Founder, CollectorHQ

Key Takeaways

Consumer proposal fees are built into your total proposal payment — you do not pay anything extra above what you offer creditors
The LIT takes approximately 20% of your proposal payments as their fee, plus a 5% Superintendent's levy, before distributing the remainder to creditors
Bankruptcy base cost is $1,800–$2,500 minimum; surplus income adds 50% of net income over threshold ($2,355/month for single person in 2026) for up to 21 months
Initial consultations are free by law — no LIT may charge for a first assessment
Fees are regulated by the Bankruptcy and Insolvency Act and OSB Directive 11R4 — they are not negotiable, but the proposal amount itself is

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Licensed Insolvency Trustee fees in Canada are set by the Bankruptcy and Insolvency Act (BIA) and regulated by the Office of the Superintendent of Bankruptcy (OSB). For consumer proposals, the LIT’s fee is built into your payment — you do not pay extra above what you negotiate with creditors. For bankruptcy, the minimum cost is $1,800–$2,500 plus surplus income payments if your income exceeds the federal threshold. Initial consultations are free by law.

What You Actually Pay: Consumer Proposal vs Bankruptcy

Fee item	Consumer proposal	Bankruptcy (first-time)
Initial consultation	$0 (required by OSB Code of Ethics)	$0 (required by OSB Code of Ethics)
Filing fee (to OSB)	$100	$75
Mandatory credit counselling	2 sessions ($85/session = $170)	2 sessions ($85/session = $170)
LIT administrator’s fee	~20% of payments received (BIA Tariff)	Built into minimum estate; $1,500–$2,000 base
Superintendent’s levy	5% of all distributions	5% of all realizations
Surplus income payments	None — fixed payment, never increases	50% of net income above threshold × 21 months
Minimum total cost	No floor — whatever you negotiate	$1,800–$2,500 minimum
Typical cost ($25K unsecured debt)	$5,000–$12,500 depending on offer	$1,800–$25,000+ depending on income

How Consumer Proposal Fees Work

In a consumer proposal, the LIT acts as the proposal administrator. Their fees come from the payments you make — there is no separate invoice sent to you.

The flow looks like this:

You make monthly payments to your LIT (e.g., $300/month for 60 months = $18,000 total)
From each payment, the LIT deducts their administrator’s fee (~20% under BIA Tariff)
The OSB Superintendent’s levy (5%) is also deducted
The remaining amount (~75%) is distributed to your creditors proportionally

On an $18,000 proposal over 60 months:

Creditors receive approximately $13,500 (75%)
LIT administrator’s fee: approximately $3,600 (20%)
Superintendent’s levy: approximately $900 (5%)

The critical point: your creditors agreed to accept the net amount — they know the LIT and OSB take their shares. The proposal offer you made accounts for this structure.

What Determines the Proposal Amount?

The proposal amount you offer creditors is what drives the total cost — not LIT fees. Creditors must accept a proposal that offers more than they would receive in bankruptcy. A Licensed Insolvency Trustee will calculate the minimum viable offer based on:

Your assets (what creditors could seize in bankruptcy after provincial exemptions)
Your surplus income (what bankruptcy would generate from your paycheque)
Your unsecured debt total

If bankruptcy would yield creditors $8,000 total, your proposal must offer more than $8,000. LIT fees are the same percentage either way.

How Bankruptcy Fees Work

Bankruptcy fees have two components: the base cost and surplus income.

Base Cost

Every bankruptcy in Canada incurs minimum costs regardless of income or assets:

Item	Amount
Filing costs + disbursements	$1,200–$1,700 (varies by trustee)
Mandatory credit counselling (2 sessions)	$170 ($85 × 2)
Trustee’s minimum remuneration	$500–$800
Superintendent’s levy (5% of realizations)	Varies
Total base minimum	$1,800–$2,500

Surplus Income

Surplus income is the largest variable cost in bankruptcy. The OSB sets thresholds annually. In 2026:

Household size	Net monthly income threshold	You pay 50% of income above this
1 person	$2,355	e.g., earn $4,000 net → pay $823/month
2 people	$2,934	e.g., combined $5,500 net → pay $1,283/month
3 people	$3,601	—
4 people	$4,373	—
5 people	$4,958	—

Surplus income payments continue for:

9 months if no surplus income (income below threshold)
21 months if any surplus income applies

Example: Single person earning $5,000/month net after taxes.

Threshold: $2,355
Excess: $2,645
Monthly payment: $1,323 (50% of $2,645)
Duration: 21 months
Surplus income total: $27,783
Plus base cost: $2,000
Total bankruptcy cost: approximately $29,783

A consumer proposal for the same person with $40,000 in debt might offer $20,000 over 60 months ($333/month) — significantly less than bankruptcy.

LIT Fees Are the Same Across Canada

Licensed Insolvency Trustees are regulated by the federal government through the OSB, not provincial bodies. The BIA Tariff and OSB Directive 11R4 govern fees nationally. An LIT in Halifax charges the same percentage structure as one in Vancouver. Geographic variation affects travel costs and disbursements, not the fee framework.

What varies by LIT firm:

How they structure the proposal offer (which affects your total payment)
Responsiveness and service quality
Experience with specific creditor types (CRA, student loans, secured debt)
Whether they offer remote/virtual filing

What does not vary:

The percentage fee structure under the BIA Tariff
The Superintendent’s levy rate (5%)
The counselling session fee ($85/session)
The requirement to provide a free initial consultation

When LIT Costs Are Worth It vs When They’re Not

Your situation	LIT filing	Better alternative
Unsecured debt over $10,000, can’t repay in 3 years	Worth it	—
Income earner with assets to protect (home equity, RRSP)	Worth it — proposal protects assets	—
CRA garnishment active or imminent	Worth it — stay of proceedings stops CRA same day	—
Debt under $5,000	Not worth it	Negotiate directly with creditors
Debt $5,000–$10,000, credit above 620	Consider alternatives first	Debt management plan (DMP) through non-profit credit counselling
Student loans under 7 years from last study	Won’t help — not dischargeable	Repayment Assistance Plan (RAP)
Primarily secured debt (mortgage, car loan)	Limited benefit	Renegotiate with lenders directly

Finding a Licensed Insolvency Trustee

Only Licensed Insolvency Trustees can administer consumer proposals and bankruptcies in Canada. The OSB licenses and regulates them. Debt consultants, credit counsellors, and debt settlement companies cannot file proposals or bankruptcies on your behalf — they can only refer you.

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Red flags that indicate a non-LIT is trying to charge you upfront:

Upfront fees before filing
Promises to “settle” debt without filing a formal insolvency
No OSB licence number provided when asked
“Proposal company” or “debt resolution” branding without an LIT name

All licensed trustees are listed in the OSB’s public registry. Your initial consultation is free and legally required to be free.

Find a Licensed Insolvency Trustee near you →

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Frequently Asked Questions

How much does a Licensed Insolvency Trustee charge for a consumer proposal in Canada?

How much does bankruptcy cost in Canada?

Is the first LIT consultation free in Canada?

Can I negotiate LIT fees in Canada?

What is the Superintendent's levy on a consumer proposal?