WORRIED ABOUT DEBT? Meet the Licensed Insolvency TrusteeNov 09, 2018
Have you ever heard of a Licensed Insolvency Trustee (LIT)? Don’t worry, most people haven’t. In fact, in a recent poll, only 21 per cent of Canadians were familiar with what an LIT does. After learning about the best practices for managing debt, 51 per cent of Canadians with debt problems said they would be likely to consult an LIT for advice.
Let us break how can LIT can assist you with debt management.
Think of an LIT as a debt solutions expert. Their job is to help people fix their debt problems. No need to feel embarrassed, they’ve seen everything. If you are worried about your debt, an LIT can give you sound advice on a wide range of debt relief options and point you in the right direction.
An LIT is a qualified debt professional
An LIT is licensed by the Superintendent of Bankruptcy to help people who are having difficulty paying their debts. They can give you practical advice on all things debt related, like budgeting and debt consolidation.
More specifically, an LIT is the only professional who can offer insolvency services like consumer proposals and bankruptcies.
Never heard of a consumer proposal either? They are actually a lot more common than bankruptcies. A consumer proposal has the advantage of letting you keep all your assets (like your house and your car). An LIT may suggest this option if you are unable to pay some of your debt.
An LIT can also offer bankruptcy services if you are unable to pay back everything you owe. If the word “bankruptcy” scares you, read more here. Chances are they aren’t as frightening as you might think. A bankruptcy has the advantage of wiping your debt slate clean so you can start fresh. You don’t necessarily have to lose your house or your car either. The LIT is the best person to turn to for understanding how provincial exemptions affect your personal situation.
An LIT helps you take control of your debt
One of the key benefits of working with an LIT is that they deal directly with your creditors so you don’t have to.
Once an LIT initiates a consumer proposal, collection calls and other actions against you stop (like lawsuits, wage garnishments). Interest also stops accumulating on your debts. Next, the LIT will negotiate agreements with your creditors that allow you to make monthly payments through one person, your LIT, over a fixed amount of time (no more than five years).
If you decide to file for bankruptcy, an LIT will handle the sale of some of your assets and use the money to repay your creditors. You’ll also make monthly payments to your LIT during this process which can be completed in as few as nine months.
Fact: LITs are the most highly trained and educated debt professionals in Canada. In working with one, you will receive valuable counselling on your finances. As part of the consumer proposal and bankruptcy process, you will attend two credit counselling sessions where your LIT will provide you with the necessary educational tools to avoid debt problems in the future.
LITs are different from other debt professionals
It’s important not to confuse an LIT with a non-profit credit counsellor, a debt consultant or a “debt coach”. While non-profit credit counsellors are accredited professionals who can help you prepare a debt management plan, they cannot negotiate a deal where you pay less than what you owe, like in a consumer proposal. They can’t offer personal bankruptcy services either.
As for debt consultants and debt coaches, they may help you with budgeting and debt management. Some debt consultants offer a valuable service, but they are not all the same. Be aware of the details of any agreement before you sign. Because debt consultants are unlicensed and unregulated, so are their fees. They can charge you whatever they want.
An LIT’s fees, on the other hand, are regulated by the government. And you can be assured that you are dealing with a licensed professional. Learn more about the differences between dealing with an LIT vs. a Debt Counsellor here.
When should you contact an LIT?
When debt gets scary, it’s very easy to bury your head in the sand. Collection emails, letters, phone calls and service interruptions are meant to intimidate and stress you out. They can also lead to feelings of guilt and embarrassment. No one wants to discuss their credit card bills with friends and family. Asking for help can be hard. An LIT makes it easier. They have dealt with all sorts of debt relief cases. They will not judge you or your debt load. Rather, they will work with you, by negotiating with your creditors and coming up with an arrangement that you can actually afford.
If you are having trouble paying your debts, get in touch with a Licensed Insolvency Trustee as soon as possible. An LIT will take the time to explain how each debt solution applies to your own financial situation.
Finally, it’s important to remember that all LITs offer a free consultation. There is no obligation, no risk. This is the first step in finding the right kind of help.
Are you having trouble managing your debt? Learn more about your debt relief options by joining the conversation with us on Twitter #LITsCanHelp #LeaveDebtBehind #FLM2018