What is a Licensed Insolvency Trustee & How do they help?
If you wonder what the role of a Licensed Insolvency Trustee is, and how they can help those in financial trouble, you are not alone. Licensed Insolvency Trustees were previously called “Bankruptcy Trustees”, but the name was changed in recognition that they do much more than just bankruptcies. The website of the Superintendent of Bankruptcy describes Licensed Insolvency Trustees (LITs) as follows:
Licensed Insolvency Trustees (LITs) are federally regulated professionals who provide advice and services to individuals and businesses with debt problems. LITs help people make informed choices to deal with their financial difficulties.
If you need to file Bankruptcy or Consumer Proposal in Canada, you must work with a Licensed Insolvency Trustee.
If you choose to file bankruptcy, your Trustee will explain your all your duties, to ensure your discharge from your bankruptcy as quickly as possible.
In a Consumer Proposal however, your Trustee (called an Administrator in this process) will help you determine how much you can/should pay and will handle the negotiation process with your creditors. Also, in a Consumer Proposal the LIT ensures that the proposal is better than a bankruptcy. Read our blog on this topic here.
When dealing with a Trustee, you can expect:
- Federally regulated fees – all Trustees, no matter which firm or province, have their fees determined by law.
- A professional bound by a strict code of ethics, which all trustees must follow;
- A complete discussion of all your financial options, including those that don’t involve the Trustee, such as consolidation or addictions counselling.
What does a Licensed Insolvency Trustee do?
In a bankruptcy process, the two primary jobs of a Trustee are:
- To sell any assets that aren’t exempt by law, and collect any amounts owing to the debtor. Also in certain cases the Trustee must calculate a portion of the debtor’s monthly income to pay to the Estate. (“surplus income”).
- To take whatever money they recover and distribute it to the creditors at the end of the bankruptcy.
Bankruptcy is a complex process. A Licensed Insolvency Trustee helps you through the process, to make sure it gets done quickly and efficiently.
How to do I find an LIT?
If you worry about your debt, have collection agencies calling you, or are worried about being garnished then contact us for your free consultation to understand your options. When you talk to us, there is no risk, no charge, and no obligation. A consultation with a Trustee will not affect your credit rating, you can do this by phone, video conference or in person, at a time that suits your schedule.