The Ethical Framework Guiding Licensed Insolvency Trustees
Navigating financial straits can be an intimidating endeavor, especially when it involves discussing your personal finances with a stranger. But when you’re drowning in debt and can’t seem to find a way out, it’s imperative to seek professional help from someone who adheres to a Code of Ethics for Licensed Insolvency Trustees (LITs).
Under their guidance, you can explore all possible options to get back on your feet, without any bias. They are more than just bankruptcy administrators; their services extend to filing consumer proposals, budgeting, credit management, and providing legal protection from creditors.
The Role of a Licensed Insolvency Trustee
An LIT is a professional you can trust to steer you through the labyrinth of debt management. But what exactly is their role?
LITs adhere to the Code of Ethics for Licensed Insolvency Trustees, a set of standards trustees must abide by to perform their roles effectively. If you’re anxious about seeking help from an LIT, rest assured that they’re credible professionals you can trust.
Becoming a Licensed Insolvency Trustee: The Journey
Becoming an LIT isn’t a cakewalk. It demands rigorous training, which includes qualification programs, courses, and examinations.
The journey begins with the Chartered Insolvency and Restructuring Professional Qualification Program (CIRP Qualification Program or CQP). To be eligible for this program, the aspirant must either hold a professional designation in accounting or auditing, or have an undergraduate degree from a recognized post-secondary institution.
Post the CQP, candidates must pass an oral examination administered by the Office of the Superintendent of Bankruptcy (OSB). Only then can they apply for a trustee license through the OSB. This rigorous training assures you that LITs are well-equipped with the knowledge and experience to guide you through your financial journey.
The Ethical Code for Licensed Insolvency Trustees
The Code of Ethics for Trustees in Bankruptcy is part of the Bankruptcy and Insolvency General Rules. It outlines the responsibilities and ethical standards of Trustees. The key components of the code include:
- Impartial cooperation with all parties;
- Confidentiality;
- Honesty and integrity;
- Conflicts of interest;
- Proper property and asset management, and
- Employee conduct.
The Code, which is a part of the Bankruptcy and Insolvency Act (BIA) – a federal legislation, ensures that debtors receive the financial assistance they need, honestly and ethically.
The Significance of the Code of Ethics
The Code of Ethics for Licensed Insolvency Trustees plays a pivotal role in ensuring that those seeking financial help receive all the legal assistance they need. It establishes a national standard of service and strives to eliminate inequality and poor advising.
As per Rule 39 of the code, Trustees must discuss all potential options and their consequences with the debtor, without coercing them into any particular path. The Trustees can’t advise anything that they know, or should know, is against the law and the Bankruptcy and Insolvency Act.
Contrary to popular belief, LITs don’t work for the creditors. Their role is to represent the interests of all parties involved and ensure fairness. As per the Code, a Trustee must remain impartial to all parties involved.
Confidentiality: A Key Aspect
Trustees are bound by the Code to maintain confidentiality at all times unless the person to whom the information relates to agrees or the law demands it. When dealing with a reputable LIT, you can be assured that your personal information is safe and secure.
Beyond the Code of Ethics
Apart from the Code of Ethics for Licensed Insolvency Trustees, many Trustees are also Chartered Professional Accountants. Thus, they must adhere to the CPA Code of Professional Conduct, which dictates five fundamental principles of ethics:
Professional behavior: Their conduct should uphold the reputation of the profession and the public.
Integrity and due care: They should perform services with integrity and due care at all times.
Objectivity: CPAs should not let their work be affected by conflicts of interest, bias, or external influence.
Professional Competence: They should maintain their skills and stay informed about developments in the field.
Confidentiality: CPAs cannot disclose information without proper and specific authority.
Need Help? Reach Out to Us!
Excessive debt can have far-reaching implications, from financial to emotional, to relationships.
At Bankruptcy Canada, we offer a free initial assessment where we will analyze your finances and present you with the available options. This meeting is confidential and non-judgmental.
Filing a Consumer Proposal or a Bankruptcy in Canada is designed to provide the honest, unfortunate debtor with a fresh financial start. Contact us to set up your free appointment today.
