Licensed Insolvency Trustees, a new name for Trustees!
This new name replaces “Trustee in Bankruptcy” or, in French “Syndic de faillite.”
The Office of the Superintendent of Bankruptcy Canada (OSB) made this change, effective on April 1, 2016.
The change was made to more accurately reflect what trustees do.
Trustees don’t only handle bankruptcies as the old name suggested.
Need Help Reviewing Your Financial Situation?
Contact a Licensed Trustee for a Free Debt Relief Evaluation
Why Was The Term Bankruptcy Trustees Changed to Licensed Insolvency Trustees?
The term “Licensed Insolvency Trustee” is more general and inclusive.
Since an LIT’s role is not limited to bankruptcy, our professional title should reflect the work we do.
A more modern title was necessary to distance ourselves from the stigma associated with the term “bankruptcy”.
The use of a new and more appropriate title is the solution for:
- Correctly describing the role of LITs;
- Communicating the solutions we can offer people who are looking for debt relief.
Licensed Insolvency Trustees, a New Name for Trustees: A more accurate description of what we do
In recent years, the profession has developed to include numerous functions relating to insolvency.
LITs now offer the following:
- Consumer Proposals
- Commercial or individual bankruptcy
- Proposals for businesses
- Receiverships
- Monitoring under the Companies’ Creditors Arrangement Act (CCAA)
- Budget advice
- Counselling
The importance of a more inviting title for Trustees
For many, the term “bankruptcy” carries a highly pejorative connotation.
It is often associated with feelings of guilt, failure, and shame.
Consider the term “morally bankrupt”.
Some people refused to consult a Trustee in Bankruptcy, regardless of the state of their finances.
However, as insolvency specialists, we offer a number of solutions to achieve debt freedom.
In many cases, bankruptcy can be avoided; while still offering a path to debt freedom.
Because of the negative connotation associated with “bankruptcy” some people decided to turn to other resources with less menacing titles, such as credit advisors.
In some cases, people are unwittingly exposed to greater financial risk.
Many counsellors in the field of insolvency do not hold a licence and are not regulated by the OSB, as are LITs.
They are free to adopt whatever title they choose; “budget counsellor”, “credit counsellor”, “financial coach”, “debt settlement company”, “Debt Consultants” and so on.
For more information please refer to these articles on Credit Counsellors and Debt Consultants.
Unique Qualifications of Licensed Insolvency Trustees
Licensed Insolvency Trustees occupy a special category of trust in the insolvency process.
- Trustees are court appointed officers;
- Trustees are the only ones who can help a person declare bankruptcy or make a consumer proposal to their unsecured creditors;
- LITs have a responsibility to ensure the bankrupt debtor and the creditors are treated fairly;
- All Trustees must follow a code of ethics laid out by the government and their CPA organization;
- Trustees retain and disburse monies collected, in trust accounts, subject to audit by the Office of the Superintendent of Bankruptcy;
- Trustees are the only debt professionals who can stop a wage garnishment;
- Only a Licensed Insolvency Trustee can prevent all unsecured creditors from attempting collection from debtors behind on their payments.
If you have any questions about this or any other matters there are three ways for you to get answers:
Need Help Reviewing Your Financial Situation?
Contact a Licensed Trustee for a Free Debt Relief Evaluation
Information on Consumer Proposals
Consumer Proposals in Canada – An Alternative to Bankruptcy
What is a Consumer Proposal?
How to Amend a Consumer Proposal
What are the Benefits of a Consumer Proposal?
What are the Steps in a Proposal?
Consumer Proposal Eligibility
What Debts Are Erased in a Consumer Proposal?
Is There Life After a Proposal?
Canadian Bankruptcies
How to File for Bankruptcy
What is Bankruptcy?
Bankruptcy FAQs
How Does Bankruptcy Work?
What is the Cost of Bankruptcy in Canada?
How to Rebuild Credit Following Bankruptcy
Personal Bankruptcy in Canada
What Debts are Erased in Bankruptcy?
