What Services Can a Licensed Insolvency Trustee Provide?

Posted in Bankruptcy, Consumer Proposals | Comments Off on What Services Can a Licensed Insolvency Trustee Provide?

Financial struggles can feel overwhelming—but you’re not alone, and there is help. A Licensed Insolvency Trustee (LIT) is a trusted professional who can provide the guidance and legal solutions you need to regain control of your finances.

When bills pile up, credit cards are maxed out, or your business is losing money, it’s easy to feel stuck and unsure of what to do next. That’s where an LIT comes in. They’re federally regulated professionals in Canada who specialize in helping people and businesses through tough financial situations.

LITs are the only professionals legally authorized to file bankruptcies and consumer proposals, but their support goes well beyond that. They offer personalized advice, negotiate with creditors on your behalf, and help you explore all available options—whether that means avoiding bankruptcy, restructuring debt, or building healthier financial habits.

If you’re feeling the pressure, understanding what an LIT can do for you is the first step toward a fresh start. They’ll guide you through the process with solutions that are tailored to your situation, helping you regain financial control with confidence.

Services Provided by Licensed Insolvency Trustees

Licensed Insolvency Trustees (LITs) offer a range of services designed to address both personal and business financial challenges. Their expertise goes beyond just handling bankruptcy—they also provide financial counseling, debt management solutions, and guidance tailored to each client’s unique situation.

Here’s a closer look at the key services they provide:

Financial Assessment & Debt Consultation

One of the key roles of a Licensed Insolvency Trustee (LIT) is to assess your financial situation and provide expert, tailored advice on the best path forward. This process starts with a detailed review of your financial position, including:

• Your debts – credit cards, loans, unpaid bills, etc.
• Your income and expenses – to understand your cash flow
• Your assets – such as property, vehicles, or savings
• Your financial goals – both short- and long-term

Based on this analysis, the LIT will explain your available options, which may include:

• Filing for bankruptcy
• Proposing a consumer proposal to your creditors
• Considering alternatives such as debt consolidation or credit counseling

An LIT also helps you understand the pros and cons of each option, including:

• The long-term impact on your credit
• The legal protections available to you
• The costs and timelines involved in each solution

The first consultation is typically free, giving you a no-pressure opportunity to discuss your situation and get professional guidance.

Whether you’re overwhelmed by personal debt or struggling to manage business loans, an LIT can provide the clarity and support you need. Their goal is to help you avoid bankruptcy when possible and guide you towards alternative paths to financial recovery.

Consumer Proposal Filing & Administration

A consumer proposal is a service offered by a Licensed Insolvency Trustee as an alternative to bankruptcy. It allows individuals to negotiate directly with creditors to reduce their total debt and arrange manageable monthly payments over a period of up to five years. This option may be ideal for those looking to minimize the challenges and long-term effects of bankruptcy while still securing much-needed debt relief.

The LIT’s role in a consumer proposal includes:

• Assessing eligibility – The trustee will evaluate your income, debts, and assets to ensure that a consumer proposal is the right solution for you.
• Negotiating with creditors – Once the proposal is drafted, the LIT will work with your creditors to present the offer. This includes explaining the benefits of accepting the proposal for both parties.
• Filing the proposal – The trustee submits the proposal to the OSB and supervises its administration. If the creditors agree to the terms, the proposal is accepted, and you can begin making payments.
• Supervision and support – Throughout the process, the trustee ensures you are on track with payments, providing guidance and support in the event that issues arise.

Bankruptcy Filing & Administration

In cases where other debt-relief options are not viable, a Licensed Insolvency Trustee can guide individuals and businesses through the process of declaring bankruptcy. Bankruptcy is a legal process that can provide individuals or businesses relief from overwhelming debts by eliminating most types of unsecured debt, such as credit card balances, medical bills, and personal loans.

The role of the LIT in this process includes:

• Filing the paperwork – The trustee prepares and submits the bankruptcy documents to the OSB and creditors, ensuring everything complies with legal requirements.
• Securing protection – Once bankruptcy is filed, the individual or business is protected from collection actions, including creditor calls, lawsuits, garnishments, and wage freezes. The LIT ensures this protection is upheld throughout the bankruptcy process.
• Asset management – In some cases, the trustee may need to sell certain assets to pay off creditors. However, the LIT ensures that exemptions apply, meaning that you can retain essential assets like household goods, a vehicle, or retirement savings.
• Debt discharge – Upon completion of bankruptcy (which typically lasts 9 to 21 months for individuals), the trustee helps facilitate the discharge of your remaining debts, allowing you to start fresh

Corporate Insolvency Services

Licensed Insolvency Trustees (LITs) support both individuals and businesses facing financial challenges. They play a vital role in corporate insolvency, helping companies restructure debt, liquidate assets, or navigate the insolvency process effectively.

Some corporate insolvency services include:

• Corporate bankruptcy – When a business can no longer meet its financial obligations, an LIT facilitates the bankruptcy process, overseeing asset liquidation, fund distribution to creditors, and ensuring employee rights are upheld.
• Companies’ Creditors Arrangement Act (CCAA) – Under this Canadian federal law, businesses with debts exceeding $5 million can restructure financial obligations while continuing operations. An LIT, acting as a court-appointed monitor, ensures compliance and guides the recovery process.
• Debt restructuring – For businesses that remain operational but need to reorganize their finances, an LIT negotiates with creditors to establish a manageable repayment plan that supports long-term viability.
• Asset liquidation – When selling assets is necessary to settle debts, an LIT manages the process efficiently, handling sales and the fair distribution of proceeds to creditors.

Debt Settlement and Negotiation

Debt settlement and negotiation are other valuable services that Licensed Insolvency Trustees provide. Rather than resorting to bankruptcy or a consumer proposal, the LIT can help you negotiate with your creditors to settle your debts for a lower amount.

The LIT will:

• Negotiate with creditors – The trustee will communicate with creditors to negotiate a reduced lump-sum payment that satisfies the outstanding debt.
• Provide alternatives – The LIT may explore options like consolidating your debt into one manageable payment, potentially avoiding bankruptcy or a consumer proposal.
• Legal protections – If you are unable to reach a settlement, the LIT will guide you toward more formal options like filing a proposal or bankruptcy.

Financial Education and Credit Counseling

In addition to debt management services, LITs offer valuable financial education and credit counseling to help individuals avoid future financial issues. They provide insight into budgeting, managing credit, and saving for future needs, ensuring that their clients are better prepared to handle finances after insolvency.

Some of the educational services include:

• Budgeting tips – LITs offer guidance on creating a realistic budget that aligns with your income and financial obligations.
• Credit rebuilding – After bankruptcy or a consumer proposal, an LIT can help you understand how to rebuild your credit score by offering advice on responsible borrowing and improving your credit history.
• Financial planning – LITs provide strategies to help individuals and businesses manage their finances moving forward, promoting long-term financial health.

Post-Insolvency Support

Completing a bankruptcy or consumer proposal is just the beginning of financial recovery—continued support plays a vital role in achieving long-term stability. A Licensed Insolvency Trustee (LIT) may assist clients by providing expert guidance on rebuilding credit, monitoring financial progress, and offering strategic advice to prevent future setbacks. This support can include reviewing credit reports, recommending responsible credit-building practices, and ensuring individuals stay on track toward financial wellness. Additionally, an LIT can help individuals create a realistic budget tailored to their financial goals, enabling them to develop sustainable spending habits. By fostering financial literacy and proactive money management, clients can build a stronger foundation for long-term financial success.

Get a Fresh Financial Start Now

A Licensed Insolvency Trustee provides a wide array of services designed to help individuals and businesses navigate financial difficulties. Whether you are seeking to manage personal debt through a bankruptcy or consumer proposal, or need assistance with corporate insolvency, an LIT can help you explore your options and make informed decisions. They offer a vital combination of financial expertise, legal knowledge, and personalized support to help you regain control of your finances.

Debt doesn’t have to define your future. A Licensed Insolvency Trustee can guide you toward practical, legal, and effective solutions to regain financial stability. Whether you need debt restructuring, financial counseling, or insolvency proceedings, the right support can make all the difference.

Don’t wait—reach out to a Licensed Insolvency Trustee today and start your journey toward financial relief and a fresh start!

Contact Richard Killen
FREE No Commitment Consultation

Recent Blog Posts

• How to Handle Lingering Holiday Credit Card Debt - What to Do Before It Gets Worse
• Holiday Debt Relief Tips to Kickstart 2026 Right
• January Debt Solutions: Your Fresh Start Begins Now
• Holiday Debt Relief Ontario: Where to Get Help Now
• Avoiding the January Credit Card Hangover: 7 Steps to Stay Debt-Free This Holiday