If you’re in financial difficulty, you may be considering filing for bankruptcy. This is a stressful situation to be in, and you’ll want a trustworthy and empathetic professional by your side to guide you through your financial recovery. That’s what a “bankruptcy trustee” does, but they actually don’t call them that anymore.
The only person who can legally administer a bankruptcy or a consumer proposal is a Licensed Insolvency Trustee.
A “Bankruptcy Trustee” and a “Licensed Insolvency Trustee” refer to the same person. The only difference is that the term “Bankruptcy Trustee” was changed to Licensed Insolvency Trustee (LIT) back in 2016. Why? Because a trustee or an LIT can help you with a lot more than just a bankruptcy.
From budget management, credit counselling, debt management proposals to consumer proposals and bankruptcy, an LIT is an ethical and knowledgeable resource for exploring all your debt relief options.
It’s important to know you’re getting financial advice and services from a qualified professional. An LIT is someone who has shown they have the required skills, knowledge and experience to be given a license from the Office of the Superintendent of Bankruptcy (OSB).
LITs are regulated by the OSB and are mandated to ensure individuals and/or corporations and creditors are treated fairly, according to their rights, as set out by the Bankruptcy and Insolvency Act of Canada.
A LIT is also subjected to oversight by the OSB and must adhere to federally regulated standards of practice, such as the Code of Ethics for Trustees.
If you’re considering any form of debt relief, it’s reassuring to know you’re dealing with a certified professional.
There are about 1,000 individuals and 200 corporations in Canada licensed to act as Licensed Insolvency Trustees and assist individuals in filing a bankruptcy or consumer proposal.
To find out if a person is a bankruptcy trustee (LIT) in Canada, you can search the Superintendent of Bankruptcy website.
LIT’s offer free initial consultations, review financial situations, and determine options for individuals or corporations in dealing with their creditors.
Once a consumer proposal or bankruptcy has been filed, the LIT will deal with your creditors on your behalf. Filing either a consumer proposal or bankruptcy legally stops your creditors from pursuing any collection action, such as letters or phone calls, with you. It also halts any legal action taken against you.
As LIT’s are licensed by the federal government the fees they charge are also regulated by the government. BDO’s LIT’s do not charge for the initial consultation.
Because fees are the same no matter what LIT you deal with, you want to make sure you’re working with the right LIT for you. Your relationship with an LIT can last anywhere from nine months to five years. It’s important to have someone you can trust and rely on to be there for you.
Filing a bankruptcy or consumer proposal is a legal process and as mentioned, only a LIT can file either of these debt solutions on your behalf.
When people research their debt options, they may believe that filing for bankruptcy is their only choice. Yet, after talking to an LIT, a lot of individuals find other alternatives to bankruptcy, such as credit counselling, debt management plans or a consumer proposal.
At the first meeting with an LIT, you’ll be asked to provide some information about how much money you owe, your income, the value of your assets and your monthly financial obligations (rent, car payments etc.)
The LIT will then take this information and lay out the options that are available to you and guide you towards the one they know will be the best for you. This process is very quick and can be done in about an hour.
LITs are not there to judge you and your financial situation. They’re there to help you.
A Licensed Insolvency Trustee:
The benefits of bankruptcy are:
From consumer proposals to bankruptcy to stopping legal action being taken against you, LIT’s provide a variety of services. Their most important one though is getting you out of debt. If you’re struggling with money, book a free consultation with a BDO Licensed Insolvency Trustee to have them show you debt solution that will fit your unique needs.
Article written by Licensed Insolvency Trustee, Ilan Kibel
Ilan has a creative, respectful and cooperative approach to helping people overcome debt. He takes great pride in his work, whether it is helping a family save their home while maximizing the recovery to creditors or restructuring and preserving a viable business for its owners, stakeholders and employees.
Ilan believes that the most rewarding part of his job is helping individuals reduce their debt stress and helping them realize that there are always options.