How Does a Licensed Insolvency Trustee Get Paid?

The fees of a licensed insolvency trustee often raise questions: how much does it cost, who pays, and are there any hidden fees?

The good news is that everything is regulated by law and designed to be fair and transparent!

Fees governed by law

The fees of a licensed insolvency trustee are governed entirely by the Bankruptcy and Insolvency Act (BIA), a federal statute that governs all insolvency proceedings in Canada.

In other words, no matter which trustee or firm you choose, the amounts collected are set according to the same rules established by the Office of the Superintendent of Bankruptcy (OSB).

What do the fees of a licensed insolvency trustee cover?

The fees cover the administrative, legal and financial work carried out by the trustee:

• Assessment of the client's financial situation;

• Preparation and filing of legal documents;

• Negotiation and communication with creditors;

• Follow-up of payments and distribution of funds;

• Closing the file and issuing the certificate of discharge.

These fees are therefore regulated, uniform and audited, ensuring debtors a fair process, regardless of the province or firm.

Fees depending on the type of file

A trustee's remuneration varies depending on the nature of the case: personal bankruptcy or consumer proposal. They are still governed by the Bankruptcy and Insolvency Act (BIA) and approved by the Office of the Superintendent of Bankruptcy (OSB).

Consumer proposal

In the case of a consumer proposal, the syndic's fees are included directly in your monthly payments. So you don't have to pay anything separately.

The trustee receives :

• A fixed base amount of $1,500;

• Plus 20% of amounts redistributed to creditors;

• As well as administrative fees and applicable taxes.

Personal bankruptcy

In a personal bankruptcy, the trustee's fees are generally deducted from the bankrupt's assets (property, income or tax refunds).

The syndic is therefore not free to set his own rates. Everything is determined by a federal scale, guaranteeing fairness and uniformity between firms.

Differences between practices

Although trustee fees are strictly regulated by law, certain administrative practices may vary from one firm to another. These differences mainly concern initial deposit fees.

Initial deposit fee

Before the official filing of a consumer proposal, some trustees ask for a small initial deposit to cover the first administrative costs (preparing the file, opening a trust account, transmission to the Office of the Superintendent of Bankruptcy).

• This amount varies from firm to firm.

• At Mallette, in the majority of cases, no initial deposit is required, which means it doesn't add to your costs.

This approach aims to make the process immediately accessible, without burdening the customer's financial situation when they seek help.

No surprises with Mallette

At Mallette, everything is clear from the outset: no hidden fees, no nasty surprises. Everything is governed by the Bankruptcy and Insolvency Act, guaranteeing complete transparency and professional guidance every step of the way.

What's more, no interest is added to your debts, unlike credit cards or lines of credit where rates often exceed 18% to 22%. This approach allows you to repay only the negotiated capital, without additional charges or financial pressure.

It's a simple, humane and practical way of restoring your financial stability and confidence.