How Much Does a Consumer Proposal Cost in Canada?

If you’re struggling with debt and looking for a realistic way to get back on track, you’ve probably come across the idea of a consumer proposal. It’s one of the most popular debt-relief options in Canada because it lets you settle your unsecured debts by paying back only a portion of what you owe, often far less than the full amount. But before you decide if it’s right for you, it’s totally normal to wonder, “How much does a consumer proposal cost?”

The short answer is: less than you might think.

What Is a Consumer Proposal?

Before you get caught up in the process, it’s important to learn how a consumer proposal works.

In the simplest terms, a consumer proposal rolls all your unsecured debts, like credit cards and personal loans, into one manageable monthly payment you can actually afford. You go from juggling multiple bills to handling one single payment, and once the proposal is accepted, the remaining debt is forgiven. Interest stops on most debts, collection calls stop, and the entire process is overseen by a Licensed Insolvency Trustee (LIT), the only professional in Canada legally authorized to file a consumer proposal.

Your LIT works with you to create a repayment offer based on what you can realistically pay back. Many people end up reducing their total debt by up to 80%, which is why a consumer proposal is one of the most effective ways to get relief without filing for bankruptcy.

How Much Does a Consumer Proposal Cost?

This is the big question, and the good news is that the cost of a consumer proposal is always built into your monthly payment. You never pay extra on top of what you offer your creditors.

The overall cost depends on your income, your debt, and what creditors are willing to accept — but consumer proposals often reduce the total amount you owe by a significant amount. There are no hidden charges, and you never pay fees upfront.

If you’re weighing your options, it might help to compare costs between consumer proposals and bankruptcy to see which one aligns better with your goals.

Breakdown of Consumer Proposal Fees

Here’s a breakdown of what it looks like.

Mandatory Fees

There are a few standard government-regulated fees included in the amount you offer to your creditors:

• $115 filing fee paid to the Office of the Superintendent of Bankruptcy (OSB)
• Two credit counselling sessions at about $85 each, also taken from your proposal payments

These costs are never charged separately, instead they’re part of your monthly payment.

Licensed Insolvency Trustee Fees

LIT fees are fully regulated by the federal government. Trustees are not allowed to set their own rates, unlike debt consultants or lawyers. You never pay a LIT out-of-pocket, as their fees come out of the funds distributed to your creditors.

This is a major reason why it’s safer to work directly with an LIT instead of an unregulated debt consultant who may charge extra or refer you to a trustee for an additional fee.

Administrative Costs

On top of that, a flat administration fee of $1,500 is paid to the LIT, in addition to 20% of the funds distributed to the creditors, all of which, again, comes out of your offer amount. These administration amounts can vary, so it is a good idea to check with your LIT for the most current details.

Finally, the LIT pays any amounts for taxes, like HST or GST, for professional fees received, and the regulator receives a 5% amount of the funds distributed to creditors, which is called a “levy”, to allow for expenditures related to administering the insolvency process in Canada.

Factors That Affect How Much You’ll Pay Back

The cost of a consumer proposal varies based on a few key factors:

Total Amount of The Debt You Owe

The more unsecured debt you have, the higher your proposal offer may be, simply because your Licensed Insolvency Trustee needs to show creditors a repayment amount that’s realistic and fair for everyone involved.

The Complexity of Your Case

If your finances are a bit tangled — maybe you’ve got several creditors, different types of debt, or income that goes up and down — your proposal might need a slightly higher offer to keep everyone on board. When things are simpler, the cost is usually lower because there’s less to sort through. Your LIT will walk you through what this means for your situation so there are no surprises.

Your Location

Consumer proposal costs are regulated nationwide, but tax rates may differ slightly by province. While this rarely has a major impact, your LIT can explain any regional differences.

Your Income and Ability to Pay

Your monthly payment is based on what you can comfortably afford. If your income is lower or unpredictable, payments can be structured to fit your reality. If your income is higher, your proposal may reflect that — but the goal is always the same: a plan that’s fair, manageable, and sustainable.

Ways to Manage Consumer Proposal Costs

Understanding how much a consumer proposal costs is helpful, but knowing how to manage those costs matters just as much.

Free Initial Consultations

Most Licensed Insolvency Trustees, including the team at Farber, offer free consultations. This is one of the best ways to understand the cost of a consumer proposal before you commit to anything. You’ll get a full breakdown of your options without pressure or upfront fees.

It’s always better to speak directly with a LIT than a debt consultant. Consultants are unregulated, often charge unnecessary fees, and cannot file a consumer proposal or bankruptcy.

Of course, if you want to get a sense of what the process feels like from a real person’s perspective, you can read about real consumer proposal experiences as well.

Budgeting for Monthly Payments

Your monthly proposal payment is designed to be affordable. Since fees are spread out across the entire proposal period, it’s easier to build payments into your budget. Your LIT can help you understand how the payment fits with your income and expenses.

Can You Get a Credit Card During a Consumer Proposal?

Yes, you can, but it might look a little different. Many people start with a secured credit card or prepaid card. These are great tools for rebuilding your credit during your consumer proposal, and they help you manage purchases without taking on new debt.

How Farber Helps You Navigate the Costs

Dealing with debt can feel like a heavy burden, but you do not have to face it alone. At Farber, we are here to help you figure out if a consumer proposal is the best way to tackle your debt.

We offer free consultations to help you understand the process, see what it would cost, and decide if it is the right fit for you. Plus, we will be with you every step of the way, from putting together your proposal to negotiating with your creditors to ensuring you complete the terms of the proposal to put your debt behind you.

With Farber by your side, you can feel confident about taking control of your financial future — starting today! Book a free consultation today and get the clarity you need to move forward with confidence.

 

FAQs: Consumer Proposal Costs in Canada

How much does a consumer proposal cost in Canada?

Most people pay back 20–40% of their total unsecured debt. The cost depends on your financial situation and ability to repay.

Are there any upfront fees for a consumer proposal?

No. All costs, including trustee fees, are included in your monthly payments.

How are trustee fees calculated?

Trustee fees are set by federal regulation and come from the funds you pay—not additional charges.

Do I need to pay for credit counselling sessions separately?

No, the two mandatory sessions are included in your consumer proposal payment amount.

Can a consumer proposal really reduce my debt by up to 80%?

Yes. Many clients pay only a fraction of what they owe, depending on income and debt level.