Licensed Insolvency Trustee
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Licensed Insolvency Trustee
(formerly Bankruptcy Trustee)
Selecting The Right Licensed Insolvency Trustee
Once you have decided that you need professional help in getting rid of your debts, you will need to select a local Licensed Insolvency Trustee. This may be the second most important step in your path to becoming debt free (with the first being seeking professional debt help).
What Is A Licensed Insolvency Trustee?
The easiest way to explain who a Licensed Insolvency Trustee (LIT) is, would be to paraphrase our governing body’s definition. According to the Office of the Superintendent of Bankruptcy, a LIT is a federally regulated professional who provides advice and services to individuals (and businesses) with debt problems. LIT’s help people make informed choices to deal with their financial difficulties.
In Canada, Licensed Insolvency Trustee’s are the only professionals authorized to administer government regulated insolvency proceedings (such as a consumer proposal or a bankruptcy), that allow a person to be discharged from their debts. This means no other person or organization is legally authorized to file a bankruptcy or consumer proposal.
Why a Licensed Insolvency Trustee is your best choice in dealing with your debts.
When you work with a LIT, you can feel rest assured that you are dealing with a professional that has the knowledge, experience and skills required to be granted a licensed by the Office of the Superintendent of Bankruptcy (OSB). No other debt advisor has the knowledge and skills to be granted this licensed by the federal government.
Licensed Insolvency Trustee’s are regulated by the OSB and are subject to ongoing reviews and are required to follow professional standards of practice including a code of ethics. As part of this regulation, the LIT’s fees are also regulated by the federal government, meaning that fee’s between trustee’s are all the same for consumer insolvencies.
What is the Role of a Licensed Insolvency Trustee (Bankruptcy Trustee)?
Before we explain what the role of a Licensed Insolvency Trustee is, it is important to understand a few important facts:
- A Licensed Insolvency Trustee does not work for the creditors (this is often a line used by for-profit debt consultants who mislead people in order to charge their ridiculous fees for essentially doing very little – important lesson: know who you are dealing with when seeking debt help); and
- The Trustee acts like a referee or a mediator. A Licensed Insolvency Trustee does not work for you nor do they work for the creditors. The trustee works as a referee to make sure that the rules and duties of the process (of a bankruptcy or consumer proposal) are followed by the parties involved and governed by the laws under the Bankruptcy and Insolvency Act.
Role of a Licensed Insolvency Trustee (formerly called Trustee in Bankruptcy):
- Meet with you to assess your current position, including your financial challenges and to go over the various options that are available in dealing with your debts. During this meeting, the Trustee will answer any questions that you may have.
- Make sure that you understand the advantages and disadvantages of each of the options.
- If you decide to move forward with a consumer proposal or a bankruptcy, prepare the legal documents that will need to be signed by you. Before we proceed with signing the paperwork, we will take an additional step to answer any new questions that you make have.
- Once the official legal paperwork has been signed, the Trustee will electronically file the statutory documents with the Office of the Superintendent of Bankruptcy (OSB). Once the OSB’s office has accepted these documents (this is official once they issue a unique number to your bankruptcy or consumer proposal and is referred to as the Estate Number), it is now official, and the legal protection starts (referred to as a stay of proceedings).
- Advise your creditors by sending them the paperwork (referred to as a creditors package) so that they will stop calling you and deal directly with us.
- Start the administration of the bankruptcy or consumer proposal. This is comprised of: reviewing proof of claims sent by your creditors, sell any assets that are not exempt, distribute payments to your proven creditors and ensure that you are complying with the required duties.
- Apply for your discharge (in a bankruptcy) or issue the certificate of full performance (in a consumer proposal) so that you are no longer legally liable for your debts. You are now debt free!
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