🛡️ Canada’s Federally Regulated Debt Experts
Licensed Insolvency Trustees (LITs)
The only professionals in Canada federally licensed and regulated by the Office of the Superintendent of Bankruptcy (OSB) under the Bankruptcy and Insolvency Act (BIA).
Licensed Insolvency Trustees (LITs)
The only professionals in Canada federally licensed and regulated by the Office of the Superintendent of Bankruptcy (OSB) under the Bankruptcy and Insolvency Act (BIA).
Licensed Insolvency Trustees in Canada
Licensed Insolvency Trustees (LITs)—formerly known as Bankruptcy Trustees—are the only professionals in Canada federally licensed and regulated by the Office of the Superintendent of Bankruptcy (OSB) under the Bankruptcy and Insolvency Act (BIA). An LIT is legally authorized to administer Consumer Proposals and Personal Bankruptcies, providing immediate court-ordered protection from creditors.
A Licensed Insolvency Trustee (LIT) is an officer of the court and a highly trained financial professional who provides unbiased debt advice to individuals and businesses. As Canada's only federally regulated debt relief experts, LITs are legally empowered to freeze collection calls, stop CRA wage garnishments, and negotiate legally binding debt settlements that can reduce your unsecured principal by up to 80%.
What Does a Licensed Insolvency Trustee Do?
When you meet with an LIT, their statutory duty is to assess your complete financial picture without judgment and present all available debt solutions—not just bankruptcy.
An LIT actively guides you through four core areas:
- Comprehensive Financial Assessment: Evaluates your total unsecured debts, income, monthly expenses, and asset protection rights under provincial exemption laws.
- Structuring Legal Debt Protections: Files the formal paperwork to trigger an immediate Stay of Proceedings, making it illegal for creditors, collection agencies, or the CRA to contact you or garnish your wages.
- Administering Insolvency Estates: Acts as an impartial administrator between you and your creditors, managing payments, reviewing proven claims, and chairing creditor voting.
- Providing Mandatory BIA Credit Counseling: Delivers two federally mandated financial counseling sessions to help you build a sustainable budget, manage money, and rebuild your credit score post-insolvency.
Why Choose an LIT Over an Unlicensed "Debt Consultant"?
In Canada, any individual can open a commercial business and call themselves a "debt coach," "debt advisor," or "credit consultant." However, unlicensed debt consultants cannot administer legally binding debt reduction programs.
Understanding the difference protects you from paying unnecessary fees:
Licensed Insolvency Trustee vs. Unlicensed Debt Consultant
Know your legal protections and rights before seeking debt relief in Canada
| Feature / Protection | Licensed Insolvency Trustee (LIT) | Unlicensed Debt Consultant / Coach |
|---|---|---|
| Federal License & OSB Regulation |
✓ Yes Governed by OSB & BIA Code of Ethics |
✕ No Unregulated commercial business |
| Can Administer Consumer Proposals? |
✓ Yes Exclusive legal authority |
✕ No Must hand you off to an LIT |
| Can Stop Lawsuits & Wage Garnishments? |
✓ Yes Triggers legal Stay of Proceedings |
✕ No Cannot legally stop legal action |
| Upfront Setup & Assessment Fees |
$0 First consultation is free |
Charges $1,000+ Non-refundable fees |
| Government-Regulated Fee Structure |
✓ Yes Tariffs set by federal law |
✕ No Charges arbitrary fees |
| Formal Dispute / Complaint Process |
✓ Yes Regulated through OSB/ISED |
✕ No Private commercial dispute |
Governed by OSB & BIA Code of Ethics
Unregulated commercial business
Exclusive legal authority
Must hand you off to an LIT
Triggers legal Stay of Proceedings
Cannot legally stop legal action
First consultation free
Non-refundable upfront fees
Tariffs set by federal law
Charges arbitrary fees
Regulated through OSB/ISED
Private commercial dispute
CONSUMER ALERT: Avoid Double Fee Charging
Unlicensed "debt consultants" frequently promise to "negotiate your debt," charge thousands in upfront fees, and then simply refer you to a Licensed Insolvency Trustee.
By law, LIT initial consultations are FREE. Any trustee fees for a Consumer Proposal or Bankruptcy are regulated by OSB tariffs and deducted directly out of your single monthly proposal payment. You never need to pay an intermediary.
3. How LIT Fees Are Regulated Under Canadian Law
One of the greatest assurances of working with a Licensed Insolvency Trustee is fee transparency. You never pay out-of-pocket setup fees for a Consumer Proposal or Personal Bankruptcy.
- Consumer Proposals: The LIT's fee is calculated using a strict tariff set out in the Bankruptcy and Insolvency Act. The fee is paid directly out of the single monthly payment agreed upon by your creditors. If you agree to pay $300/month, you pay $300/month—the trustee's administration costs come out of that pool.
- Personal Bankruptcies: Administration costs are set by federal standards. If you have low income, fees are typically covered through a fixed monthly contribution or your surplus income payments.
4. How the LIT Process Works: Step-by-Step
Understanding what to expect during your debt relief journey removes fear and uncertainty:
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Step 1: Free, Confidential Consultation: You meet with an LIT (in-person or via secure video conference) to review your debts, income, and assets. The trustee explains all options—including budgeting, bank consolidation, credit counseling, proposals, and bankruptcy.
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Step 2: Custom Plan Preparation: If a Consumer Proposal or Bankruptcy is your best route, the LIT prepares the official documents tailored to what you can realistically afford.
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Step 3: Filing & Immediate Protection: The LIT submits your filing to the Office of the Superintendent of Bankruptcy (OSB). The Stay of Proceedings takes effect instantly, stopping interest charges, collection actions, and wage garnishments.
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Step 4: Creditor Administration & Counseling: The LIT handles all communication with your creditors, collects your fixed monthly payments, and conducts your 2 mandatory insolvency counseling sessions.
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Step 5: Official Debt Discharge: Once your proposal terms or bankruptcy duties are completed, the LIT issues your Certificate of Full Performance or Discharge, legally releasing you from all eligible unsecured debts.
Find Your Personal Debt Relief Solution
Licensed Insolvency Trustees are here to help. Get a free assessment of your options.