What is the cost of filing a consumer proposal?
Short answer: more than the cost of a bankruptcy, but less than you owe
Creditors will only accept a consumer proposal if you offer them more than what they would receive in a bankruptcy. For example, if in a bankruptcy you would lose your house with equity of $20,000 (meaning the creditors would get $20,000 in a bankruptcy), the creditors would not generally accept a $10,000 proposal. They would prefer that you go bankrupt, so that your house would be sold and they would get their share of the $20,000 proceeds.
So, to determine what your proposal will cost, your proposal administrator will first calculate the expected realizations in a bankruptcy, and then offer your creditors a greater amount, based on your ability to pay.
For a detailed discussion, please see our blog article on How Much Will My Consumer Proposal Cost?
What are the fees to file a consumer proposal?
There are no "up front" or "hidden" fees in a consumer proposal. All consumer proposal administrators are licensed by the federal government, and the government regulates their fees. In other words, every proposal administrator receives the same fee for the same proposal.
The good news is that the fees come out of your monthly payment, so it's the creditors that are paying for the cost. So, if the creditors agree to a proposal of $400 per month, you only pay $400 per month.
Your administrator receives a fee of approximately 20% of the money that is paid to the creditors, but again, the most important fact is that the cost of the proposal is included in your monthly payment; there are no additional costs to you.
To find out more, use our free, on-line debt options calculator to estimate the cost of your consumer proposal.
