- WHY WAS THE NAME CHANGED FROM TRUSTEE FOR BANKRUPTCY TO LICENSED INSOLVENCY TRUSTEE?
- WHAT’S THE DIFFERENCE BETWEEN A TRUSTEE IN BANKRUPTCY AND A LIT?
- WHY BANKRUPTCY TRUSTEES ARE YOUR BEST CHOICE FOR DEBT ADVICE
- DO BANKRUPTCY TRUSTEES WORK FOR THE CREDITORS?
- CONTACT THE DEBT HELP PROFESSIONALS IN GREATER TORONTO AREA
Trustee for Bankruptcy – Licensed Trustees in Bankruptcy
When you are in financial trouble and are feeling overwhelmed by debt, an important step in your overall financial recovery is to set up a free meeting with a licensed debt professional like a Trustee for Bankruptcy to help you deal with your debt problems. A Licensed Insolvency Trustee or a LIT was previously called a trustee for bankruptcy, a trustee of bankruptcy or a bankruptcy trustee.
WHY WAS THE NAME CHANGED FROM TRUSTEE FOR BANKRUPTCY TO LICENSED INSOLVENCY TRUSTEE?
The Trustee in Bankruptcy title was changed to the official name Licensed Insolvency Trustee (LIT) by the Office of the Superintendent of Bankruptcy (OSB) effective on April 1, 2016.
The OSB had two main purposes for the name change. Firstly, it is to provide a more accurate description of the types of services offered in the insolvency system. Many Canadians held the misperception that bankruptcy trustees could only provide bankruptcy services and that they should only go to a trustee if they are considering bankruptcy. The new name reflected all the services that trustees do. Licensed trustees can provide a wide range of debt management solutions, including all insolvency services such as bankruptcy, consumer proposals and division I proposals, as well as other services through informal arrangements such as credit counselling and debt consolidation.
The second objective of the name change is to help Canadians more easily recognize and identify individuals who are professionally licensed to provide debt restructuring services under the Bankruptcy & Insolvency Act. Many Canadians don’t know the difference between a licensed and unlicensed provider and the new name can help them easily identify which professionals have a license and which providers do not.
WHAT’S THE DIFFERENCE BETWEEN A TRUSTEE IN BANKRUPTCY AND A LIT?
There is no difference. Although the professional designation has changed, the role and services that the trustees offer remain the same. It’s only the old title – trustee in bankruptcy, trustee for bankruptcy, bankruptcy trustee or other related terms that will be replaced with a more accurate term – licensed insolvency trustee or LIT.
- LITs still have the same powers and duties as Trustees in Bankruptcy under the Bankruptcy and Insolvency Act (BIA).
- LITS are still federally regulated by the OSB.
- LITs will need to sign a consent agreement with the OSB to begin using the LIT name.
The same rigorous training and education are required to obtain a trustee license. To become a LIT, an individual must complete a program of studies, pass two levels of written examination and get through a final examination before an Oral Board. A LIT is also required to pass the Insolvency Counsellor’s Qualification Course.
Only individuals licensed through the federal government can hold the designation of Licensed Insolvency Trustee and are legally permitted to administer bankruptcies or consumer proposals in Canada.
WHY BANKRUPTCY TRUSTEES ARE YOUR BEST CHOICE FOR DEBT ADVICE
A licensed bankruptcy trustee is essentially an expert in all things debt related. Most LIT’s possess solid accounting expertise and extensive knowledge of governing legislation which means that they can give you accurate information about different debt solutions as prescribed under the Bankruptcy and Insolvency Act (BIA). They can help you evaluate different debt relief programs, compare the cost and benefits of each and explain how each alternative will impact you.
LIT’s are the only professionals that can administer a consumer proposal or bankruptcy in Canada. They are empowered by the law under the Bankruptcy & Insolvency Act to give legal advice about your options to settle your debt and they have authority as officers of the court to negotiate directly with your creditors and administer solutions to reduce your debts legally.
Bankruptcy trustees are federally regulated by the Office of the Superintendent of Bankruptcy and practice according to high levels of professional standards and rules of conduct. They’re the only professionals required by law to give you all your debt relief options which includes both formal and informal arrangements. They’re also obligated by a strict code of conduct to give the best advice to help you deal with your financial problems so you can make a fresh start.
In accordance with the BIA, a trustee can provide protection from creditors and creditor actions. They can provide this protection through the automatic feature known as a
“Stay of Proceedings,” which immediately stops any collection activities and legal actions against you. As soon as you decide that going bankrupt is the best way out of debt, your trustee will prepare the paperwork and file the documents with the OSB. Once your application is filed, all parties involved will be notified and the ‘automatic stay” is in place and you are protected from wage garnishments, collection agencies and lawsuits from people you owe.
Licensed trustees provide free, no-obligation consultations. The initial consultation is always free. The LIT will meet with you to review your financial situation, evaluate the cause of your financial difficulties and advise you about your options. There is no pressure to decide on a solution. Whether you take their advice or not is entirely up to you – you can simply walk away knowing you have different options and take that information to decide what’s best for you.
DO BANKRUPTCY TRUSTEES WORK FOR THE CREDITORS?
A widespread myth surrounding LIT’s is that they work for the creditors. The fact is that they do not work for the creditors nor the debtors. They have a duty of care to all stakeholders involved, that includes you, your creditors, and other people affected by your actions, to offer an impartial view and act in the best interests of all parties in accordance with the rules and standards prescribed in the Bankruptcy & Insolvency Act. Their primary objective is to look for a solution that is fair for all involved.
CONTACT THE DEBT HELP PROFESSIONALS IN GREATER TORONTO AREA
If you’re struggling with debt or exploring options to get out of debt, the first step you should take is to meet with a LIT in Toronto for a free consultation. The Licensed Insolvency Trustees at Richard Killen & Associates are the most qualified advisors you can talk to concerning your debts. We’re not here to “talk you into filing bankruptcy.” Our sole objective is to help you deal with your debts. We will explore all possible options with you and ensure that you find the right solution for you.
Remember that only a trustee for bankruptcy or Licensed Insolvency Trustee is the only debt professional that is licensed by the federal government to provide bankruptcy services in Canada