The Role of a Licensed Insolvency Trustee in Bankruptcy and Consumer Proposals
A Licensed Insolvency Trustee (LIT), sanctioned by the Canadian federal government, is the sole professional with the authority to file consumer bankruptcies and proposals. This profession, known as Bankruptcy Trustees in Canada before 2016, was renamed to reflect the expanded range of procedures they handle beyond just bankruptcies.
Identifying a Debt Problem: The First Step
The very first step in this process is acknowledging the existence of a debt issue. Here are several key indicators that might suggest you need to consult a Licensed Insolvency Trustee:
- Struggling to keep track of multiple credit account bills and their due dates.
- Finding it increasingly challenging to meet the minimum monthly payments on credit cards.
- Opening new credit accounts to pay off debts on existing accounts.
- Skipping payments on some credit accounts.
- Avoiding phone calls fearing they might be from credit companies or collection agencies.
- Being denied new credit.
- Experiencing sleeplessness or anxiety due to debt issues.
If you recognize one or more of these signs, a Licensed Insolvency Trustee can potentially help improve your financial circumstances.
The Role of a Licensed Insolvency Trustee
Licensed Insolvency Trustees are adept at helping you navigate the complexities of various debt solutions. They are skilled debt consultants who provide advice on debt management, prepare consumer proposals for creditors, assist with bankruptcies, and negotiate informal debt settlements.
Once you file for bankruptcy or submit a consumer proposal with a LIT, they communicate directly with your creditors on your behalf. This means you no longer have to deal with harassing phone calls from creditors or wage garnishments. A Licensed Insolvency Trustee ensures that no legal action or collections from unsecured creditors will proceed.
Benefits of Consulting a Licensed Insolvency Trustee
There are several advantages to meeting with a Licensed Insolvency Trustee:
- The first consultation with a LIT is usually free of charge. This provides an opportunity to discuss your financial situation and determine if you and the trustee can work well together.
- Be prepared to share some details about your current financial situation during your initial meeting. This allows for a productive discussion about potential solutions for improving your financial outlook.
- Any personal or financial information you share with a Licensed Insolvency Trustee is kept confidential.
- Licensed Insolvency Trustees do not judge you based on your financial situation, as everyone’s circumstances are unique.
If you decide to hire a Licensed Insolvency Trustee to help with a bankruptcy or consumer proposal, you will meet again to provide them with detailed information about your debts, income, and assets. They will explain the process and prepare the paperwork for submission to the Office of the Superintendent of Bankruptcy. This marks the beginning of your journey towards financial stability!
