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How Much Does A Consumer Proposal Cost?

Consumer Proposal Cost: A Negotiated Debt Settlement

A consumer proposal is a negotiated debt settlement arrangement arranged through a Licensed Insolvency Trustee. A consumer proposal can result in savings of as much as 70-80% however the cost of a proposal is based on your personal situation. The golden rule of a successful consumer proposal is that the cost of a consumer proposal must work for both the debtor and the creditor. 

For a creditor to accept a debt proposal, they will want to receive more than they would recover if you file bankruptcy. 

For a debtor to succeed with a proposal, the payments must be affordable and reasonable given your financial situation.

The amount you will have to repay will depend on 3 factors:

  • your income and any surplus income you would pay in a bankruptcy;
  • assets you own that would be surrendered in a bankruptcy, and
  • who you owe money to (different creditors expect different consumer proposal percentage recoveries).

While every situation is unique, a consumer proposal can commonly reduce principal repayment to as low as 25% of the original amount owing.

Watch our video below to understand how the cost of a consumer proposal is typically calculated when you meet with a Licensed Insolvency Trustee.

Try our consumer proposal calculator to see what your payments might be.

Who negotiates Consumer Proposal payment terms?

Proposal payments and terms are negotiated between the debtor and creditor with the help of your licensed insolvency trustee acting as administrator of the proposal. During your debt assessment, the trustee will review your budget and debts and recommend how much to offer your creditors.

Your proposal amount can be paid over a period of up to 5 years, interest free, although lump sum payments are also possible. Consumer proposals can also be paid off early at any time.

Once your debt proposal is accepted you make one, single monthly payment to the trustee. 

If your financial circumstances change you may defer up to two payments during a consumer proposal. Miss three payments and the proposal fails. Technically, your consumer proposal is ‘deemed to be annulled’ on the date your third monthly payment became due. If your credit proposal is annulled then your full debts return and your creditors may take action against you again. You do not however, automatically become bankrupt.

If you think you might miss a third payment you do have options available to put in place before your proposal fails. Your trustee can help negotiate and file amended payment terms. As long as these are accepted by the creditors, you can continue with the new proposal terms until completion. If your situation has changed dramatically, you can also choose to file bankruptcy during any proposal.

How does a Consumer Proposal Administrator get paid?

The cost of administering your proposal is included in your single monthly payment.

Consumer proposal administrators are licensed trustees, registered with the federal government under the Bankruptcy and Insolvency Act and as such fees paid to a trustee for administering a consumer proposal are set by legislation. Trustee fees are included in the payment you negotiate with your creditors. If your creditors agree to a deal to accept $350 each month, then that is all you pay.

There are

  • no additional fees,
  • no up-front fees,
  • no set-up fees,
  • and no minimum fees.

You do not make any payments until your consumer proposal is officially filed.

Get a free quote based on your situation

Our team of Licensed Insolvency Trustees treat each situation as unique. We know there are no cookie cutter solutions and that is why we have such a high success rate for consumer proposals.

Hoyes Michalos has a 99% acceptance rate for all proposals we file. We understand what creditors are looking for and what debtors need.

We also offer convenient, flexible, pre-authorized payments to help make managing your payments easier. Arrange weekly, bi-weekly or monthly payments, based on what works for you.

Get A Personalized Debt Free Plan

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What our clients have to say:

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“I was overwhelmed with credit debt. Being bombarded with constant phone calls, and letters, from debt collectors was very stressful. It seemed like there was no way out. Until I heard about Hoyes, on my local talk radio station. They are friendly, caring, knowledgeable, and professional, with many year's of experience. During my first meeting, they took the time to learn about my debt, and financial situation. Explaining my different options, and helping to come up with a plan that would work best for me. They helped me avoid filing for bankruptcy, by putting forward a consumer proposal to my creditors. My proposal was accepted, and I am happy to finally be debt free, thanks to Hoyes. It feels like a huge weight has been lifted off of my shoulders. Hoyes are the best debt relief specialists.”


Our licensed professionals will help you explore your debt relief options.
Arrange a free consultation in any of our locations across Ontario today.