Licensed Insolvency Trustee
Licensed Insolvency Trustees in Canada
Government Licensed Debt Relief Experts
Understanding the Role of Licensed Insolvency TrusteesA Licensed Insolvency Trustee (LIT) is a federally authorized professional who provides guidance and services to individuals and businesses experiencing financial difficulties. Their role is multifaceted, encompassing debt management, insolvency, and bankruptcy proceedings. This article delves into the critical aspects of their work, their qualifications, and the benefits of engaging their services.
Who is a Licensed Insolvency Trustee?A Licensed Insolvency Trustee is an individual certified by the Superintendent of Bankruptcy in Canada to manage bankruptcies, administer proposals, and oversee assets held in trust. LITs have the knowledge and authority to provide debtors with both information and advice about the bankruptcy process, ensuring that debtor’s and creditor’s rights are respected.
Primary Responsibilities of a Licensed Insolvency TrusteeLITs have distinct responsibilities, including assessing financial situations, filing bankruptcy or consumer proposals, managing the administration of estates, providing counselling, and discharging debts. Let’s examine these responsibilities in detail:
Assessing Financial SituationsLITs evaluate the financial circumstances of individuals or businesses seeking help with debt management or insolvency. They provide professional advice on the best course of action, which may include informal debt settlement, a formal proposal to creditors, or bankruptcy proceedings.
Filing Bankruptcy or Consumer ProposalsIf bankruptcy or a consumer proposal is the best solution, LITs are responsible for preparing and filing the necessary documentation with relevant authorities. They also inform creditors of the proceedings and oversee the process.
Managing the Administration of EstatesLITs administer the bankruptcy or proposal process, which includes collecting and liquidating assets, reviewing and approving creditor claims, distributing proceeds to creditors, and ensuring compliance with all legal requirements.
Providing CounsellingLITs often provide financial counselling to individuals going through bankruptcy or consumer proposals. They help them understand the process, their rights, responsibilities, and the steps they can take to regain financial stability.
Discharging DebtsLITs oversee the discharge of a debtor’s eligible debts at the end of the bankruptcy or proposal process, marking the end of their legal obligation to repay those debts.
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The Importance of Licensed Insolvency Trustees
LITs play a significant role in helping individuals and businesses handle their financial difficulties. Here are some reasons why you should consider consulting an LIT:
Comprehensive Range of Options
LITs are the only professionals authorized to administer government-regulated insolvency proceedings that allow you to be discharged from your debt, such as consumer proposals and bankruptcies.
Direct Dealing with Creditors
Once a proposal or personal bankruptcy is filed, the LIT deals directly with creditors on your behalf. Unsecured creditors cannot continue or initiate any collection action or legal proceeding against you.
Qualified and Regulated
LITs have demonstrated the knowledge, experience, and skills to be granted a license from the Office of the Superintendent of Bankruptcy (OSB). They are subject to ongoing oversight by the OSB and must adhere to federal standards of practice, including the Code of Ethics for Trustees.
Federally Regulated Fees
The fees charged by an LIT for consumer insolvencies are regulated by the federal government. Typically, LITs do not charge for the first consultation.
Services Provided by an LIT
A Licensed Insolvency Trustee can offer a variety of services to help individuals and businesses deal with their financial difficulties. These services include:
Assessing Financial Situations: LITs evaluate your financial circumstances and provide professional advice on the best course of action. This may include informal debt settlement, a formal proposal to creditors, or bankruptcy proceedings.
Filing Bankruptcy or Consumer Proposals: If bankruptcy or a consumer proposal is the best solution, LITs are responsible for preparing and filing the necessary documentation with the relevant authorities.
Managing the Administration of Bankruptcy or Proposal Estates: LITs oversee the bankruptcy or proposal process, which includes collecting and liquidating assets, reviewing and approving creditor claims, and ensuring compliance with all legal requirements.
Counselling: LITs provide financial counselling to individuals going through bankruptcy or consumer proposals, helping them understand the process, their rights, and responsibilities, and steps to regain financial stability.
Discharging Debts: At the end of the bankruptcy or proposal process, LITs oversee the discharge of the debtor’s eligible debts, marking the end of their legal obligation to repay those debts.
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How LITs Differ from Debt Consultants
While both LITs and Debt Consultants offer advice on debt management, there are several key differences. LITs can administer Consumer Proposals and Bankruptcies, are federally regulated and licensed, their ongoing education is regulated by the government, and they have regulated fees. In contrast, Debt Consultants are not federally regulated and do not have the authority to administer Consumer Proposals and Bankruptcies.
Role of LITs in the Bankruptcy or Consumer Proposal Process
LITs play a significant role in the bankruptcy or consumer proposal process. They prepare the official documents, file the necessary paperwork with the government, deal directly with creditors on your behalf, stop any wage garnishments or lawsuits once you file, receive and approve claims from your creditors, and deal with any assets that are not exempt from seizure in a bankruptcy. They also apply for your discharge or completion certificate so you can be officially discharged from your debts.
Choosing the Right Licensed Insolvency Trustee
Dealing with debt can be a daunting task. However, choosing the right LIT can make the process easier and less stressful. Here are some factors to consider when choosing an LIT:
The LIT should take the right amount of time to go over your whole financial situation, including debts, assets, household budget, and miscellaneous expenses. The consultation should be thorough and last approximately an hour.
Clear Explanation of Options
The LIT should clearly explain your options and compare different solutions to help you understand the best option for you. You should be able to ask as many questions as you want.
Empathy and Encouragement
Your LIT should be empathetic and solutions-focused. They should listen carefully to your story and help you get through any negative feelings you may have towards your debt.
When Should You Seek Help from an LIT?
Dealing with debt can be a daunting task. Collection emails, letters, phone calls, and utilities interruptions are designed to apply pressure and can lead to feelings of guilt and embarrassment. It’s during these times of financial stress that you should seek help from a Licensed Insolvency Trustee. An LIT offers a judgment-free zone where you can discuss your financial situation and work together on a plan that suits your circumstances. They negotiate with your creditors and devise an arrangement that you can afford.
How to Become a Licensed Insolvency Trustee
Becoming an LIT requires professional training and licensing. Candidates must possess good character and reputation, be solvent, successfully complete the Chartered Insolvency and Restructuring Professional Qualification Program (CIRP), pass an Oral Board of Examination, and acquire a minimum of 2,400 hours of relevant insolvency experience.
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Licensed Insolvency Trustees provide valuable guidance and services to individuals and businesses grappling with financial difficulties. They offer a comprehensive range of options and can administer government-regulated insolvency proceedings. Their fees are federally regulated, and they are subject to ongoing oversight by the Office of the Superintendent of Bankruptcy. By choosing the right LIT, you can navigate your financial difficulties with confidence and ease.