How Much Does a Consumer Proposal Cost?

How consumer proposal fees work

A consumer proposal has no application fees, filing fees, or upfront costs. Your Licensed Insolvency Trustee is paid directly from your monthly payments. You never pay more than the amount you agreed to repay your creditors.

The trustee’s fees are set by a tariff under the Bankruptcy and Insolvency General Rules. The tariff is the same for every Licensed Insolvency Trustee in Canada.

It includes $750 on filing, $750 on court approval, 20% of funds distributed to creditors, counselling fees, and the OSB levy. All of that comes out of your payments, not on top of them.

Source: Government of Canada – Bankruptcy and Insolvency General Rules, C.R.C., c. 368

And because the tariff is fixed by the federal government, no trustee can charge you more or less than any other trustee for a consumer proposal. The cost to you is always the same amount you agreed to pay.

How your payment amount is calculated

Your Licensed Insolvency Trustee reviews your income, expenses, assets, and total debt. They calculate what you can afford to pay each month while covering rent, food, utilities and other essentials.

The trustee uses this information to propose a total repayment amount. That total gets divided into monthly payments over the term of the consumer proposal. A consumer proposal can last up to five years under the Bankruptcy and Insolvency Act.

Source: Bankruptcy and Insolvency Act, s. 66.12(5)

What a consumer proposal payment looks like

A $15,000 consumer proposal paid over five years works out to $250 per month. A $30,000 consumer proposal over the same term works out to $500 per month. Your actual amount depends on what creditors will accept based on your financial situation.

Your creditors vote on whether to accept the consumer proposal. If creditors holding the majority of your debt by value vote yes, all creditors are bound by the terms.

The higher your offer, the more likely creditors are to accept. But never propose an amount you cannot afford.

What determines the total repayment amount

The total you repay in a consumer proposal depends on four factors.

Income and surplus income thresholds

If your income is low and you have few assets, you pay less. If you earn above the surplus income threshold set by the OSB, creditors expect a higher consumer proposal amount. The surplus income threshold for a single person is $2,543 per month as of 2024.

Source: Office of the Superintendent of Bankruptcy Canada – Directive No. 11R2-2025, Surplus Income

What you would pay in bankruptcy

Creditors compare your consumer proposal to what they would receive if you declared bankruptcy. If the consumer proposal offers more than bankruptcy would, they usually accept it. Your trustee calculates both scenarios before proposing an amount.

Factor	Lower consumer proposal payment	Higher consumer proposal payment
Income	Below surplus income threshold	Above surplus income threshold
Assets	Few or no non-exempt assets	Home equity, investments, or other assets
Bankruptcy alternative	Low bankruptcy cost	High bankruptcy cost (surplus income or assets)
Creditor expectations	Smaller debts, fewer creditors	Large debts, institutional creditors like CRA

Are payments fixed throughout the term?

Your monthly consumer proposal payment stays the same from start to finish. If your income goes up during the consumer proposal, your payment does not increase. If you get a raise or a new job that pays more, you keep the extra income.

The only time your payment changes is if your income drops and you can no longer afford the original amount. If you lose your job or take a pay cut, talk to your Licensed Insolvency Trustee immediately. They can file an amendment to lower your payments or extend the term.

Creditors must vote on any amendment. If they reject it, the consumer proposal fails. Only propose an amount you can maintain even if your circumstances change.

Can you pay off a consumer proposal early?

You can pay off a consumer proposal early with no penalty. If you receive a windfall, an inheritance, or a tax refund, you can put it toward the remaining balance. The total amount owed does not decrease, but you finish the consumer proposal sooner.

Some people arrange lump sum payments from family members. A relative contributes money up front, and the consumer proposal is settled immediately. That shortens the term and gets you out of the consumer proposal faster.

What happens if you miss payments

If you default on an amount equal to three monthly payments, the consumer proposal is automatically deemed annulled under the Bankruptcy and Insolvency Act. The payments do not need to be consecutive. If you miss one payment here and two payments there, the total still counts.

Source: Bankruptcy and Insolvency Act, s. 66.31(1)

What happens when a consumer proposal is annulled

If your consumer proposal is annulled, your debt returns to its original amount minus what you have already paid. Interest resumes. Creditors can sue, garnish your wages, or place liens on your property.

Your trustee can attempt to revive the consumer proposal within 30 days of the annulment. If creditors do not object, the consumer proposal is automatically revived. If the 30-day window passes, you need a court order to revive it.

If your income drops

If your income decreases and you cannot afford your monthly payment, contact your Licensed Insolvency Trustee as soon as possible. They can file an amendment to reduce your consumer proposal payment or extend the term before you fall behind.

You need to provide proof of the income change. Pay stubs, a termination letter, or updated bank statements show your new situation. The trustee submits the amendment to your creditors for approval.

How consumer proposal costs compare to other options

Consumer proposal vs bankruptcy

Bankruptcy also has no upfront fees. The trustee’s fees are paid from your payments or asset sales, the same as with a consumer proposal. The difference is in total cost and what you give up.

	Consumer proposal	Bankruptcy
Upfront fees	None	None
Monthly payment	Fixed for the full term	Based on surplus income (can change)
Term	Up to 5 years	9 to 36 months
Assets	You keep everything	Non-exempt assets go to the trustee
Income reporting	Not required	Monthly reporting required
Credit report	R7 rating during term	R9 rating during term
Total cost if surplus income	Often lower	Often higher (surplus income for 21 months)
Total cost if no surplus income	Often higher	Often lower (9 months, minimum $1,800)

Source: Office of the Superintendent of Bankruptcy Canada – Bankruptcy Discharge

A first-time bankruptcy for someone without surplus income discharges in nine months, and the minimum cost is approximately $1,800. If you have surplus income, bankruptcy lasts 21 months and costs more. In that case, a consumer proposal is often the cheaper option overall.

Consumer proposal vs debt consolidation loan

A debt consolidation loan combines your debts into one monthly payment at a lower interest rate. You repay the full amount borrowed plus interest over the loan term. A consumer proposal reduces the total you owe.

You need decent credit to qualify for a consolidation loan. If your credit is already damaged or you are behind on payments, lenders will not approve you.

A consumer proposal does not require good credit. That is often what makes the decision for people.

What debts are included in a consumer proposal?

A consumer proposal must include all your unsecured debts. You cannot pick and choose which creditors to include.

Unsecured debts include credit cards, personal loans, lines of credit, payday loans, tax debt, and overpayments like EI or CPP.

Secured debts, such as mortgages and car loans, are not included unless you surrender the asset. If you want to keep your house or car, you continue making those payments outside the consumer proposal.

Student loans and the seven-year rule

Government student loans are included in a consumer proposal only if you ceased to be a full or part-time student at least seven years before the filing date.

The Supreme Court of Canada confirmed in 2025 that the seven-year period runs from the last date you ceased to be a student, even if your later studies were self-funded.

Source: Supreme Court of Canada – Piekut v. Canada

If it has been less than seven years since you ceased to be a student, the student loan debt is not discharged in a consumer proposal. The stay of proceedings still protects you from collection while the consumer proposal is active.

What is included in the trustee’s fee?

Licensed Insolvency Trustee fees are regulated by the Office of the Superintendent of Bankruptcy. You never pay trustee fees on top of your consumer proposal amount. Everything comes from within your payments.

The trustee’s fee covers filing the consumer proposal, communicating with creditors, holding the creditors’ meeting if one is requested, distributing funds to creditors, and issuing your certificate of full performance. Two mandatory credit counselling sessions are also included.

Are there hidden fees?

No. The trustee discloses all fees before you file. The fees are set by the government tariff and come from your monthly payments, not on top of them.

Watch out for debt settlement companies

Some debt settlement companies charge upfront fees or monthly service fees on top of your payments. Those are not consumer proposals. They are informal arrangements with no legal protection.

If a company asks for money before settling your debt, walk away.

A Licensed Insolvency Trustee is the only professional legally allowed to file a consumer proposal. No debt consultant, credit counsellor, or financial advisor can do it. If someone other than a Licensed Insolvency Trustee offers to file a consumer proposal for you, they are breaking the law.

Frequently asked questions

Do you pay fees on top of your monthly consumer proposal payment?

No. The trustee’s fees come directly from your monthly payment. You pay the amount stated in your consumer proposal, nothing more. The tariff is set by the federal government and is the same across Canada.

Can the cost of a consumer proposal change during the term?

Your monthly payment is fixed unless your income drops and you can no longer afford it. If creditors approve an amendment, the payment can be reduced or the term extended. If your income increases, your payment stays the same.

How much do you typically pay in a consumer proposal?

The amount varies based on your income, assets, and total debt. As a rough guide, someone owing $30,000 in unsecured debt with income below the surplus income threshold might pay $250 to $400 per month over five years. Someone with higher income or assets pays more. Your Licensed Insolvency Trustee calculates the exact amount based on your situation.

Can you negotiate the amount you pay in a consumer proposal?

Your Licensed Insolvency Trustee negotiates on your behalf based on what you can afford. Creditors vote on whether to accept. You can propose a lower amount, but creditors may reject it. The trustee will tell you what is realistic before filing.

What happens if you cannot afford your consumer proposal payments?

Contact your Licensed Insolvency Trustee immediately. They can file an amendment to reduce your payment or extend the term. If creditors reject the amendment or you default on an amount equal to three payments, the consumer proposal is deemed annulled.

Is a consumer proposal cheaper than bankruptcy?

It depends on your income and assets. If you have surplus income, a consumer proposal is often cheaper because your payments are fixed. If you have no surplus income and few assets, bankruptcy costs less overall because it can be completed in nine months.

Can you pay off a consumer proposal early?

Yes. You can pay the remaining balance at any time with no penalty. The total amount owed does not decrease, but you finish the consumer proposal sooner and can start rebuilding your credit earlier.

Are there hidden fees in a consumer proposal?

No. The trustee discloses all fees before you file. The fees are set by the government and come from your monthly payments, not on top of them. If anyone charges you upfront fees for a consumer proposal, they are not a Licensed Insolvency Trustee.

What is included in a Licensed Insolvency Trustee’s fee?

The trustee’s fee covers filing the consumer proposal, communicating with creditors, holding the creditors’ meeting, distributing funds, and issuing your certificate of full performance. Two mandatory counselling sessions are also included.

Do you have to pay for credit counselling sessions?

No. The two mandatory counselling sessions are included in your consumer proposal. The cost is covered by the trustee’s fee, which comes from your monthly payments. Most trustees offer sessions in person, by phone, or online, and each one lasts about an hour.

Talk to a Licensed Insolvency Trustee

If you are dealing with debt you cannot repay in full, a consumer proposal is worth looking at.

A Licensed Insolvency Trustee will review your finances, tell you exactly what a consumer proposal would cost in your situation, and explain what you’d pay under different options, with no obligation to proceed. The initial consultation is free and confidential.