Summary Bankruptcy

If you live in the (519) area code call 310John and we can help you sort through your debt issues.

Yes there is a cost to file bankruptcy. The Bankruptcy & Insolvency Act sets out a prescribed tariff fee that is charged in most situations. This can be very confusing because the tariff fees are a schedule based upon realizations, and usually only applies on bankruptcy estates with less that $15,000 worth of realizations that are available for creditors.

On this web site we have discussed surplus income and settlement of assets and all of those factors must be taken into account to determine how much trustee fees are. All trustee fees are bases on a tariff set out by the Federal Government. Assuming, you are a first time bankrupt with no surplus income, and no realizable assets the bankrupt is required to pay the base fee including disbursement fees and taxes.

Further, for greater clarification, bankruptcy trustee fees for summary administration estates (which are what most personal bankruptcies are) are set out in Rule 128 of the Bankruptcy & Insolvency Act which states:

Trustee's Fees and Disbursements in a Summary Administration

1. The fees of the trustee for services performed in a summary administration are calculated on the total receipts remaining after deducting necessary disbursements relating directly to the realization of the property of the bankrupt, and the payments to secured creditors, according to the following percentages:
   
   • 100 percent on the first $975.00 or less of receipts;
   • 35 per cent on the portion of the receipts exceeding $975.00 but not exceeding $2,000; and
   • 50 per cent on the portion of the receipts exceeding $2,000.


2. A trustee in a summary administration may claim, in addition to the amount set out in subsection (1),
   
   • the costs of counselling;
   • the fee for filing an assignment;
   • the fee payable to the registrar;
   • the amount of applicable federal and provincial taxes for goods and service; and
   • a lump sum of $100 in respect of administrative disbursements.