Is there administration fee for filing CP?

Should an amount of money or money order payable to the trustee is asked to be brought along before the proposal is approved, what is the none refundable fee, should Consumer Proposal not get approved by the creditors?

Posted from: Ontario

One Response to “Is there administration fee for filing CP?”

A licensed trustee said...

Most trustees do not require any sort of upfront payment to file a consumer proposal – the companies that charge these fees are usually debt consultants looking to get paid before they refer you to a licenced trustee… BE SKEPTICAL OF ANYONE CHARGING UP-FRONT FEES.

When you file a proposal the trustee is paid in accordance with the following scheme:

1) $1,500 preparation fee that is paid $750 on filing and $750 on approval of the proposal if there is enough money to do this – in most cases it takes 6 months for the trustee to be paid these fees as they are taken from your monthly payments.

2) 20% of all money disbursed to your creditors. These fees are paid every 6 months when your trustee sends payments to your creditors. If your trustee is sending out $3,000 towards your debts then a fee of $600 will be deducted as a fee.

These fees are set out in the Bankruptcy and Insolvency Act – all trustee are paid according to this scheme.

The Act does not say whether or not any portion of the prepartion fee is refundable if the proposal is not accepted – our policy is to refund any payments received if when you filed we told you your proposal should be accepted. If you ask us to file a proposal that is not in our opinion is not likely to be accepted then your payments will not be refunded.

You should ask whatever trustee you are dealing with what their policies are in this regard BEFORE you file.