Not All Debt Advisors are Equal

Why You Only Need a Licensed Insolvency Trustee

When it comes to managing debt, the guidance you receive can either alleviate your financial pressure or compound it. In the sea of debt advice providers, it’s crucial to understand that Not All Debt Advisors are Equal. It’s your responsibility, as a well-informed consumer, to discern the best from the rest. This article aims to equip you with the knowledge necessary to make an informed choice.

The Real Help: Licensed Insolvency Trustees (LIT)

When dealing with debt, the most reliable experts are Licensed Insolvency Trustees (LIT). They hold a distinct position in the debt-help industry for several reasons:

 

  • LITs are the only entities in this field governed by the Government of Canada.
  • They are the only professionals who have undergone rigorous training to become experts on debt relief and the Bankruptcy and Insolvency Act.
  • LITs are also trained to provide financial counselling.
  • Knowing that your advisor is an LIT can provide peace of mind and ensures you’re receiving advice from a qualified professional.

 

Debunking Misleading Claims

Unfortunately, not all companies claiming to help with your debt are as they seem. Here are some red flags to watch out for:

 

  • If you’re asked to pay any money upfront, this is a clear warning sign that the company is not an LIT.
  • If the only solution offered to you is a costly debt repayment plan.
  • If you’re told you must pay a certain amount of money before you can be referred to an LIT.

 

Remember, you can call an LIT for a free consultation anytime; you don’t need to be referred by another entity.

The ‘Non-Profit’ Misconception

The term ‘non-profit’ is often misinterpreted. Most people assume it means that the organization is a charity aimed at helping debtors. However, it frequently just means that they don’t report a profit once all expenses, including salaries and bonuses, are paid.

Unparalleled Benefits of an LIT

By engaging with an LIT, you can rest assured that you’re dealing with a professional who is well-versed in all debt help rules and regulations.

LIT vs. Debt Advisor

With an LIT, every dischargeable debt will be included in your ‘get out of debt plan’. Non-LIT companies claiming to help with debt might not be able to get all your creditors on board with the plan. However, with an LIT-facilitated Consumer Proposal or Bankruptcy, all unsecured creditors are bound by the agreement.

Non-LIT organizations can’t assist if your wages are being garnished or if Statements of Claim are filed against you. Only an LIT can effectively halt these actions, as they can issue a legal Stay of Proceedings, preventing any further collection practices against you.

Understanding the Role of an LIT

It’s crucial to understand that an LIT’s role can vary depending on where you are in the insolvency process. During the initial consultation, an LIT gathers all necessary information to provide you with the best possible solution. They are working for you during this stage.

However, after filing a Consumer Proposal or a Bankruptcy, the LIT works for the unsecured creditors, ensuring they receive their fair share of any proceeds from the insolvency.

Debunking the ‘Bad Debt’ Myth

Contrary to popular belief, not all debt is bad. Certain debts, such as a loan for a car or a mortgage for a house, can be viewed as good debt. The key is in understanding when you need ‘debt help’, and that’s where a Licensed Insolvency Trustee can assist.

Find Your Personal Debt Relief Solution

Licensed Insolvency Trustees are here to help. Get a free assessment of your options.

Discuss options to get out of debt with a trained & licensed debt relief professional.