Bankruptcy/Proposal administration costs are not subsidized by the government, legal aid or
creditors, unless the bankruptcy is initiated by a creditor. The Trustee will require that
arrangements for payment of fees and disbursements be made where the funds in the bankrupt
estate after the sale of eligible assets are not likely to be sufficient to pay for the costs of the
administration. Where a secured creditor initiates the bankruptcy, the secured creditor will often
indemnify the Trustee for the cost of the bankruptcy. When this is not the case, and if the assets
are insufficient to cover the Trustee's fees, generally a third party retainer is required before the
Trustee will act. This retainer would be held in trust until the administration is completed and
the fee requirements are determined. Funds from third parties which are not required to pay fees
are returned to the third party at the end of the administration.
