trustee fee in a consumer proposal
May 7th, 2007 by Questions
can you give me a rough idea of what to expect – if I hypothetically have $125,000. worth of unsecured debt – and I do a consumer proposal – and we agree to repay approx $50,000. what would the trustee fees be on this??
is it a percentage??
Also – we have an offer of purchase on a piece of real estate – but it won\’t close for 12 months – can this be negotiated into the proposal?? ie – $400. per month and the balance when the sale closes??
(Yes I know – I have to meet with a trustee. – planning to do so very soon)
thanks – your site is very helpful
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May 08, 2007 at 1:14 pm, A licensed trustee said:
You’ve asked a couple of different things – let’s take them one at a time.
First, if your debts are $125,000 you may be looking at a Division I proposal, not a consumer proposal. The principle difference between the two is that if you file a Division I and it is rejected you are deemed to have filed bankruptcy. Consumer proposals have no such automatic bankruptcy trigger.
Second, you’ve asked about fees. In a consumer proposal your trustee is paid a flat $1500 preparation fee and then 20% of any money that flows thoruhg their trust accounts on your behalf. (These fees are set out right in Canadian bankruptcy law). If you file a Division I proposal the terms regarding fees will be wrtitten into the document and agreed to by yourself and your creditors “up front”.
Finally, you’ve asked about your real estate deal. I don’t think I can give you a answer without knowing a lot more about the transaction. When you meet with a trustee make certain you bring as much information about the property and the deal as you can – intuitively, it should be possible to structure the deal to allow you to conitnue, BUT it may not be the best course of action for you. You’ll have to make that decision after you speak to a trustee.
Good luck.