What a consumer proposal actually costs
The most misunderstood thing about a consumer proposal is the fee. It is not negotiable, it is not set by the trustee, and it does not get added on top of what you pay. It is written into federal regulation, and you can read it yourself.
Updated July 25, 2026The regulated tariff, in full
Section 129 of the Bankruptcy and Insolvency General Rules sets out exactly what fees and expenses of the administrator must be provided for in a consumer proposal. It is short enough to quote in full.
$750 payable on filing a copy of the consumer proposal with the official receiver. $750 payable on the approval or deemed approval of the consumer proposal by the court. 20 per cent of the money distributed to creditors under the consumer proposal, payable on the distribution of the money. Plus the costs of counselling, the filing fee, the fee payable to the registrar, and applicable federal and provincial taxes.
Counselling is separately fixed at $85 per session for individual counselling and $25 per person per session for group counselling. Two counselling sessions are standard.
Sources: Bankruptcy and Insolvency General Rules, section 129 and section 131. Regulations current to 2026-06-14.
Read that again with the emphasis in the right place: the fee is what the administrator takes out of the pot, not what you pay for the privilege of having one. Your creditors receive what is left after the tariff.
What that means for your monthly payment
Because the fee comes out of the money you pay in, the practical question is never what the trustee costs. It is what monthly payment you can sustain, and for how many months. The trustee's compensation is a slice of that, fixed by regulation.
You and the trustee agree an affordable monthly payment
Based on your income, your expenses and what creditors would receive in a bankruptcy instead.
The proposal is filed and creditors vote
Creditors holding a majority in dollar value of the proven claims that vote must accept it. In practice most consumer proposals are accepted, sometimes after the trustee negotiates an amendment.
You pay the agreed amount, for up to five years
The OSB is explicit that the term of a consumer proposal cannot exceed five years. Paying it off faster is allowed, and shortens how long it stays on your credit report.
The trustee distributes to creditors, net of the regulated tariff
Which is why two trustees quoting the same monthly payment will produce essentially the same outcome for you. Choose on how well they explain things, not on price.
Not from the trustee, but from anyone standing between you and one. There are referral businesses that advertise heavily, take a fee, and then walk you to a trustee you could have found yourself in the free federal register. FCAC's position on this is unambiguous: only a Licensed Insolvency Trustee may administer a consumer proposal or a bankruptcy. Go direct.
Start with the help that costs nothing
Before you borrow, before you sign anything, and before you call a number you saw in an advertisement, use the free options. They are genuinely free, they are regulated or not for profit, and for a large share of people they are simply the better answer.
- A not for profit credit counsellor. The first appointment is normally free. They will look at your whole situation and tell you honestly whether you need a plan or a legal process. Find an accredited agency through Credit Counselling Canada. FCAC also names the Canadian Association for Financial Empowerment, and in Quebec the ACEF network listed by the Coalition des associations de consommateurs du Quebec.
- A free consultation with a Licensed Insolvency Trustee. LITs are federally licensed and supervised by the Office of the Superintendent of Bankruptcy. The first meeting is free and they are legally required to explain all your options, not just the ones they administer. Search the official register at the OSB trustee search.
- Calling your creditors yourself. Free, and more effective than most people expect. Ask for a hardship arrangement, a lower rate, or a payment plan. Banks and card issuers have hardship teams because unpaid debt costs them more than a reduced payment does.
- The federal debt self assessment. The OSB runs a free debt questionnaire that points you to the right category of solution. No sales call attached.
We earn nothing from any of the four options above. We are listing them first because they are the right first move, and because a page that buries them under a loan application is not worth reading.
The eligibility limits
To file a consumer proposal your total debts must not exceed $250,000, not including debts such as a mortgage secured by your principal residence. The term of a consumer proposal cannot exceed five years. On filing, you stop making payments directly to your unsecured creditors, and wage garnishments and lawsuits your creditors have started against you are stopped.
Source: Office of the Superintendent of Bankruptcy, read July 25, 2026.
Above that limit the equivalent process is a Division 1 proposal, which is also administered by a Licensed Insolvency Trustee but works differently and carries a harder consequence if creditors reject it.
Worth comparing against bankruptcy, where the money question is different again. In bankruptcy the OSB requires you to pay half of your surplus income once your available monthly income exceeds the published threshold for your family size by $200 or more. For 2026 those thresholds start at $2,716 a month for a single person household and rise with family size, set out in Directive No. 11R2-2026 issued March 27, 2026.
The cost that is not money
A proposal is recorded on your credit report and that has a real price attached, in the form of borrowing you cannot do and rates you will not get for a period.
Equifax Canada removes a consumer proposal three years after you have paid off all the debts according to the proposal, or six years from the date it was filed, whichever comes first. A first bankruptcy is removed six years after the discharge date.
Source: Equifax Canada, read July 25, 2026.
That is the single strongest argument for finishing a proposal early where you can: the three year clock starts when the proposal is paid off, so a proposal completed in three years can clear your report meaningfully sooner than one that runs the full five.
And the honest counterweight, which the industry rarely says out loud: if you are already several accounts into collections, your report is not clean today either. The comparison is not between a proposal and a perfect credit file. It is between a proposal with a known end date and an open ended situation with none.
Common questions
How much does a consumer proposal cost in Canada?
The administrator's fee is fixed by federal regulation: $750 payable on filing, $750 payable on approval, 20 per cent of the money distributed to creditors, plus counselling costs of $85 per individual session, plus the filing fee and applicable taxes. Critically, these fees are paid out of the payments you make into the proposal, not in addition to them.
Can a trustee charge me more than the regulated tariff?
Not for administering a consumer proposal. The tariff in section 129 of the Bankruptcy and Insolvency General Rules sets what must be provided for in the proposal. This is why shopping between trustees on price is largely pointless, and why any third party charging you a separate fee to arrange a proposal is charging for something you can get free.
How much of my debt will I have to repay in a proposal?
There is no fixed percentage in the legislation. The amount is negotiated with your creditors based on what you can afford and what they would receive if you went bankrupt instead. A trustee will calculate a specific figure for your situation at the free consultation, and creditors holding a majority in dollar value of proven claims must accept it.
What happens if I miss payments in a consumer proposal?
If three monthly payments fall into arrears the proposal is deemed annulled, and your creditors' original claims revive with the protection removed. That is the main practical risk of setting the payment too high, and it is a good reason to propose a payment you can sustain in a bad month rather than a good one.
Is a consumer proposal cheaper than bankruptcy?
Not necessarily in dollars. A proposal usually costs more in total than a bankruptcy, because you are repaying a negotiated portion of the debt rather than surrendering assets. What a proposal buys instead is that you keep assets you would otherwise lose, there are no surplus income payments, and it leaves your credit report sooner. Which is cheaper depends entirely on your assets and income.
Sources
- Bankruptcy and Insolvency General Rules, section 129. The regulated tariff for a consumer proposal administrator: $750 on filing, $750 on approval, and 20 per cent of money distributed to creditors.
- Bankruptcy and Insolvency General Rules, section 131. Counselling fees of $85 per individual session and $25 per person per group session.
- Office of the Superintendent of Bankruptcy, Consumer proposals. Source for the $250,000 debt limit and the five year maximum term. Read July 25, 2026.
- Office of the Superintendent of Bankruptcy, Considering bankruptcy. Source for the nine month and twenty one month automatic discharge, the $200 surplus income trigger, the two counselling sessions, and the debts a discharge does not release. Read July 25, 2026.
- Office of the Superintendent of Bankruptcy, Directive No. 11R2-2026, Surplus Income. Source for the 2026 monthly income thresholds by family size. Issued March 27, 2026.
- Equifax Canada, How long does information stay on my credit report. Source for the retention periods used on this page. Read July 25, 2026.
- Office of the Superintendent of Bankruptcy, Find a Licensed Insolvency Trustee. The official federal search tool. Read July 25, 2026.
- Financial Consumer Agency of Canada, Using a debt settlement company. Source for the risks, the prohibited promises, and the rule that only a Licensed Insolvency Trustee may administer a proposal or bankruptcy. Read July 25, 2026.
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