What Is a Consumer Proposal Administrator?
To administer a consumer proposal you must be a Consumer Proposal Administrator, licensed by the federal government of Canada. Usually a Consumer Proposal Administrator is also a Trustee in Bankruptcy. One of the conditions of that license is that the proposal administrator receives a fee set by the government. All administrators receive the same fee, and it is paid out of the proceeds of the proposal, so, in effect, it is the creditors that are covering the cost of the proposal.
You can hire an advisor to help you through the process, but in most cases it’s not necessary. A Consumer Proposal Administrator is required by law to inform you of all of your options and to help you through the process, so in most cases it is pointless to pay someone else, who is not regulated by the government, to help you. Your Consumer Proposal Administrator will assess your personal situation and give your advice about what kind of proposal is best for both you and your creditors since to be successful, the proposal must be workable to all parties.
As most proposal administrators are licensed bankruptcy trustees, they are subject to continuous review by the government to ensure that they are meeting all requirements set out by the law.
Debt Management Companies As Intermediaries – Are They Necessary?
There are companies that specialize in consumer proposals that charge fees to prepare your consumer proposal and guide you through the process working on your behalf. They are not trustees and claim that trustees work on behalf of the creditors while they work on behalf of you. Since a trustees fees are not paid by the debtor but instead come out of the funds from the proposal is this necessary?
If you are deep in debt and are considering filing a consumer proposal, we recommend that you talk to an expert, a Consumer Proposal Administrator, who will look at your personal situation and help your choose the best option.