5 Things You Should Know About Bankruptcy Trustees In Canada

bankruptcy trustees canada

You may have heard of bankruptcy trustees, but many people are unsure of their role. Do you need to hire a bankruptcy trustee in order to file for bankruptcy in Canada? Do bankruptcy trustees perform other roles, and can they help if you don’t actually need to file for bankruptcy? Read on for the answers. 

1. Bankruptcy Trustees Are Now Called Licensed Insolvency Trustees 

A trustee is an individual who is given the power to administer certain property, and who is legally obliged to administer it solely for specified purposes. So, a bankruptcy trustee is a person entrusted to handle the property of a bankrupt person or company in keeping with bankruptcy laws. 

In Canada, to file for bankruptcy or to file a consumer proposal, you need the services of a Trustee in Bankruptcy. In Canada in 2016, this designation was renamed Licensed Insolvency Trustee. The name change helps to indicate that a Licensed Insolvency Trustee can advise you on more than just bankruptcy - another solution may be a better fit for your situation. 

2. Licensed Insolvency Trustees Are Trained Experts 

Your first meeting with a Licensed Insolvency Trustee is free, no-obligation, and confidential - and you will be in good hands. Licensed Insolvency Trustees undergo extensive training to enable them to advise you on a wide range of debt solutions. Most also hold an accounting designation, and all are investigated by the RCMP. A large part of their education is in Canadian bankruptcy law. 

You need not feel embarrassed about seeing a Licensed Insolvency Trustee about your financial issues. Rest assured that they know you are not irresponsible, and they will treat you with respect. You will leave the meeting feeling reassured about the road ahead. 

3. Licensed Insolvency Trustees Represent You And Your Creditors 

A Licensed Insolvency Trustee’s goal is to arrive at a solution that both resolves an individual’s debt problem, and allows that person’s creditors to recover as much as possible of what is owed to them. Although these may sound like opposing aims, with the Trustee’s help you will arrive at a solution that works well for both yourself and your creditors. 

Once your Trustee files your bankruptcy or consumer proposal, you are protected from your creditors and they are prohibited from contacting you. If your creditors have any issues with the process, they will deal directly with your Trustee. 

4. Licensed Insolvency Trustees Will Explain Your Options 

If you find yourself insolvent (unable to pay your bills as they come due, and with debts totalling more than your assets), you may think that bankruptcy is around the corner. Bankruptcy provides a new financial start for tens of thousands of Canadian consumers every year, but even more individuals file consumer proposals with the help of a Licensed Insolvency Trustee. 

A Licensed Insolvency Trustee can also advise you on other solutions such as credit counselling and debt consolidation, and help determine if these options would be helpful to you. 

5. Licensed Insolvency Trustees Are The Only Professionals Authorized To File Bankruptcies And Consumer Proposals In Canada 

Under Canadian law, only a Licensed Insolvency Trustee (LIT) may file the paperwork for a bankruptcy or consumer proposal on your behalf. Other professionals may advertise assistance with these solutions, but in the end, they must refer you to an LIT for the actual filing. With the LIT’s training and specialization in insolvency solutions, it makes sense to meet with an LIT first, if you are considering consumer proposal or bankruptcy. 

As mentioned above, your first meeting with an LIT is free and confidential, and places you under no obligation. Make an appointment to meet with a Licensed Insolvency Trustee (formerly bankruptcy trustee) today!

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