Licensed Insolvency Trustee Fees in Canada (2026 Guide)

If you’re thinking about a consumer proposal or bankruptcy, one of the first worries is the cost. It feels like a cruel joke — you’re already drowning in debt, and now you have to pay a professional to help you out of it? The good news: Licensed Insolvency Trustee fees in Canada are not what most people picture. They’re not hourly. They’re not a surprise invoice at the end. And they’re not optional add-ons piled on top of your debt payments.

Licensed Insolvency Trustee fees are set by federal regulation, built into your monthly payment, and the same whether you walk into a small office in Saskatoon or a national firm in downtown Toronto. This guide explains how the fee structure actually works in 2026, what’s included, and what to ask before you sign anything.

Quick Answer Licensed Insolvency Trustee (LIT) fees in Canada are regulated by the federal Bankruptcy and Insolvency Act and built directly into your consumer proposal or bankruptcy payments — you do not pay separate hourly fees. Initial consultations are free. In a consumer proposal, the trustee receives regulated tariff fees plus 20% of funds distributed to creditors, all paid out of the single monthly amount you and your creditors agree to.

What Are Licensed Insolvency Trustee Fees?

A Licensed Insolvency Trustee (LIT) is a federally licensed professional — and the only person in Canada legally authorized to file a consumer proposal or administer a personal bankruptcy. LITs are officers of the court. They have a duty to both you and your creditors, and their fees are tightly regulated by the Bankruptcy and Insolvency Act (BIA) and the Office of the Superintendent of Bankruptcy (OSB).

What this means in plain language: an LIT cannot bill you whatever they want. The federal government sets a tariff — a formula — that determines how much they earn on each file. The same fee schedule applies to every LIT in Canada, large or small. According to the Office of the Superintendent of Bankruptcy, certain government filing fees are also adjusted annually based on the Consumer Price Index — the 2026 adjustment was 2.7%.

The payment structure is also unusual: you don’t write the LIT a separate cheque. The fee is taken out of the funds that flow through your file. In a consumer proposal, that means the fee comes out of your single monthly proposal payment — your creditors absorb the cost, not you. In a bankruptcy, fees come out of any assets that are realized, plus a small portion of any “surplus income” payments. If you’re comparing the costs of different paths, our bankruptcy vs. consumer proposal guide walks through how each one is paid for.

Pros of Regulated LIT Fees

Predictable, not hourlyYou won’t get a surprise invoice. Fees are set by tariff, so you know upfront what your monthly payment is — and that payment doesn’t grow if your file gets complicated.

Built into your paymentYou don’t pay the trustee separately. In a consumer proposal, fees come out of the same monthly amount your creditors are receiving — there is no second bill.

Free first meetingInitial consultations with an LIT are standard practice and almost always free. You can shop around without spending a dollar.

Government oversightTrustees are licensed and audited by the OSB. If a fee feels off, you can ask the OSB to review it. That oversight doesn’t exist with unregulated debt settlement companies.

Cons and Common Misunderstandings

It still costs you somethingEven though fees come from your payments, those payments are real money. A bankruptcy with no assets still has minimum costs — typically $1,800 or more spread over nine months.

The total isn’t always obviousSome people assume “free consultation” means “free service.” The trustee earns their fee once you file. That’s normal — but worth understanding.

Higher income = higher costIf you earn above the federal “surplus income” threshold during a bankruptcy, you’ll make additional payments for up to 21 months. That’s not a hidden fee — it’s a rule of bankruptcy itself.

Not the same as cheapAn LIT is the legal route, not always the lowest-cost route. For smaller debts, a debt management plan through credit counselling may be cheaper. See our credit counselling guide for that comparison.

Who Should Consider Hiring an LIT

An LIT is the right call if you:

Owe more than roughly $10,000 in unsecured debt (credit cards, lines of credit, payday loans, tax debt)
Are facing wage garnishment, lawsuits, or aggressive collections calls you can’t get to stop
Have tried to negotiate with creditors and gotten nowhere
Need legal protection — only a consumer proposal or bankruptcy gives you a court-enforced stay of proceedings
Want a fixed end date for your debt rather than minimum payments that stretch on forever

Who Should NOT Hire an LIT (At Least Not Yet)

You probably don’t need an LIT if you:

Owe under about $10,000 and can realistically pay it off in 2–3 years with a budget
Have debt that’s mostly secured (mortgage, car loan) — insolvency tools target unsecured debt
Could qualify for a debt consolidation loan at a reasonable rate — start with our consolidation guide
Are temporarily behind because of a one-time event and have a clear path back
Haven’t yet spoken to a non-profit credit counsellor about a Debt Management Plan

A Real Cost Example: Consumer Proposal vs. Bankruptcy

Let’s say Sarah, a Canadian with $35,000 in unsecured debt, is choosing between a consumer proposal and a bankruptcy. Here’s roughly how the math plays out — these are illustrative figures, not a quote.

Consumer Proposal — $250/month × 60 months$15,000 total

What goes to creditors~$10,500

Trustee tariff fees + OSB levy (built in)~$4,500

Bankruptcy (no assets, no surplus income)~$1,800 over 9 months

Original debt eliminated$35,000

In both scenarios, Sarah does not write a separate cheque to the trustee. The trustee’s fees come out of the same payments she’s already making. The big difference is that the proposal lets her keep her assets and protects her credit a bit better than bankruptcy.

Want to see real outcomes from Canadians who chose this path? We’ve collected a few in our consumer proposal success stories.

Step-by-Step: How LIT Fees Work, From First Call to Final Bill

Free consultation. You contact a Licensed Insolvency Trustee and book an initial meeting. This is free across the industry — no LIT in Canada should charge you for the first conversation. They’ll review your debts, income, assets, and family situation.
Options review. The trustee walks you through every option, not just the ones they administer. By law, they have to tell you about credit counselling, debt consolidation, and informal arrangements before recommending a proposal or bankruptcy.
You decide. If you choose to file, the trustee gives you a written estimate of your monthly payment. For a consumer proposal, that single payment covers everything: their tariff fees, the OSB levy, and what creditors receive.
Filing with the OSB. The trustee files your paperwork with the Office of the Superintendent of Bankruptcy. There’s a government filing fee here — for example, $123.17 for a Division II consumer proposal as of March 31, 2026 — which is included in the standard tariff structure under the Bankruptcy and Insolvency General Rules.
You make your monthly payment. One payment, one date, every month. The trustee deducts their regulated fee, sends the OSB its 5% levy, and distributes the remainder to your creditors.
Two mandatory counselling sessions. These are part of every consumer proposal and bankruptcy in Canada. The cost is built into the tariff — you don’t pay separately. They cover budgeting and rebuilding credit. Our financial rehabilitation guide goes deeper on what to expect.
Discharge or completion. When your final payment clears, the trustee files for your discharge or certificate of full performance. There is no balloon payment, no surprise final invoice. The number you agreed to on day one is the number you actually pay.

The Bottom Line Licensed Insolvency Trustee fees in Canada are not a hidden cost or an extra charge — they’re a regulated, transparent slice of the payment you’d be making either way. The real question isn’t “how much does the trustee cost?” It’s “is a consumer proposal or bankruptcy the right path for my debt?” Once you answer that, the fees take care of themselves.

Not sure if a consumer proposal, bankruptcy, or another path is right for you? A free, no-pressure consultation can clear it up in about 30 minutes.

Get a Free Consultation

Frequently Asked Questions

Do I have to pay a Licensed Insolvency Trustee upfront?

No. Initial consultations are free, and most LITs do not ask for any upfront retainer for a consumer proposal. In a bankruptcy, you may be asked for a small initial deposit — sometimes a few hundred dollars — to cover government filing fees and counselling, but the trustee’s professional fee itself is paid from the estate or your monthly payments, not out of your pocket separately.

Why are LIT fees the same at every firm?

Because they’re set by federal regulation. The Bankruptcy and Insolvency Act and its associated rules establish a tariff that every Licensed Insolvency Trustee in Canada must follow. A small-town LIT and a national firm charge the same regulated rate per file. What can differ is the experience, accessibility, and quality of service — but not the dollar amount on the tariff.

Can I negotiate the trustee’s fee?

Not really — the tariff is fixed by law. What you can negotiate, in a consumer proposal, is the total amount you’re offering creditors. A skilled LIT will help you propose a payment that’s fair to creditors but actually affordable on your income. The trustee’s portion of that payment is calculated by formula and isn’t open to bargaining.

What happens if I can’t keep up with my proposal payments?

If you miss the equivalent of three months of payments in a consumer proposal, it’s automatically annulled, and your creditors can resume collections. You don’t owe the trustee a penalty fee — the regulated tariff doesn’t include one — but you lose the deal. If money gets tight, contact your trustee right away. Most can defer a payment or amend the proposal once if your situation changed.

Are unregulated debt relief companies cheaper than an LIT?

Almost never. Debt settlement companies in Canada charge fees of their own — sometimes thousands of dollars upfront — and they cannot legally file a consumer proposal or bankruptcy. They often refer you to an LIT anyway, after collecting their fee. If you’re shopping for help with unsecured debt, going directly to a Licensed Insolvency Trustee or a non-profit credit counselling agency is almost always the cheaper, safer route.