How much does it cost to file bankruptcy in Toronto?
A simple question should have a simple answer, but for this question, there is no simple answer.
Almost everything we purchase has a price tag.
The price of books, clothes, food, cars, professional fees, lawyers, etc. can all be researched to get the best deal.
What you pay in a bankruptcy is mainly based on your family income. The more you and your family earn, the more you are required to pay. If your income exceeds the standards established by the government, then you will pay for a longer period as well.
In order to compute what you are required to pay in bankruptcy, we must look at your after-tax income (net monthly income) and subtract essential expenses (called non-discretionary expenses) which include:
Spousal and child support
Child care
Medical expenses (doctor prescribed)
Mandatory payroll deductions (union dues etc)
Court-ordered payments
If you are a sole proprietor, we look at your operating income (gross revenues minus business expenses), less amounts remitted for tax (installments).
What you are required to pay for personal bankruptcy in Ontario is not the same as the trustee’s fee.
So what exactly is the trustee entitled to retain for its fee?
The trustee’s fee is calculated based on receipts in the bankruptcy estate, as set out in the Tariff of the Rules of the Bankruptcy and Insolvency Act.
You do not pay the trustee fee directly; you make payments to the estate for the benefit of the creditors based on your income. The trustee takes its fee in priority to the payment to creditors.
It is a bit complicated, but the easiest way to understand this is that the trustee takes its fee from the payment to creditors.
So when you call a trustee to ask about their fee, they may have to answer by saying that they need to know a lot more about your situation before they can honestly give you an answer as to how much you may have to pay.
We typically advise that if your income is low, and you are eligible to receive an automatic discharge from bankruptcy (no court involvement) it may be possible to pay as little as $75 per month for 18 months to get a fresh start. (That’s less than a coffee and donut a day).
About The Author
Jacques Rusinek
Dr Jacques (Jojo) Rusinek successfully challenged the National Insolvency Exams in 1998 and was licensed as a trustee in bankruptcy (now known as Licensed Insolvency Trustee) in 1999. Prior to becoming a bankruptcy trustee, he practiced in the health care field where he helped people to become pain-free. Now he helps people to become debt-free.
