In Canada, bankruptcy must be filed with the help of a Licensed Insolvency Trustee.
Although you might think that you can handle the process of filing bankruptcy on your own, you can’t do it without the assistance of a trustee.
A trustee gives you advice about debt relief and bankruptcy, as well as alternatives to bankruptcy, and also handles your application and your bankruptcy file.
It’s essential to use a trustee because bankruptcy is a legal process, and you are legally required to go through a trustee.
When you are considering bankruptcy, you should get in touch with a local trustee to discuss your circumstances.
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What Does a Licensed Insolvency Trustee Do?
A Licensed Insolvency Trustee (LIT) is someone who is qualified to offer advice about debt relief, bankruptcy and consumer proposals in Canada.
Previously called bankruptcy trustees, LITs still have the same responsibilities.
They have the authority to administer laws pertaining to the Bankruptcy and Insolvency Act, helping clients to file for bankruptcy and acting as administrators for consumer proposals.
Other professionals who provide debt services, such as credit counsellors, don’t have the authority to handle the legal processes of bankruptcy and consumer proposals.
A trustee will review your finances, and discuss your income, debts, assets, and expenses with you.
They will help you to explore your debt relief options and make a recommendation for which one could be right for you.
They personalise their recommendations based on your circumstances to help you get the best results.
Who Do Trustees Work For?
Licensed Insolvency Trustees are not-for-profit professionals.
They don’t want directly for the person who is using their services, nor do they work for creditors.
They offer impartial advice, working either for themselves or for a firm of trustees.
They are independent of the government, which helps to make sure that the bankruptcy process is carried out fairly.
Many LITs are licensed CPAs and accountants, and may also provide accountancy services alongside their work as a trustee.
Some are also credit counsellors, which allows them to offer other debt relief solutions to enable debtors to avoid bankruptcy.
Will a Trustee Give Unbiased Advice?
As trustees make it their business to provide bankruptcy advice, you might wonder whether they can truly be impartial.
After all, won’t they just push you toward bankruptcy if it will make them money?
The answer is that most trustees are honest and trustworthy, and will make recommendations based on what is best for their clients.
They are qualified and licensed, and haven’t simply stepped into the role of being a trustee.
They must complete training and pass exams to become licensed, and they need to practice ethically.
You can’t file for bankruptcy without using a Licensed Insolvency Trustee.
They have the legal right to assist with bankruptcy and consumer proposals, and they can offer you the advice that you need.
Find a trustee today if you are considering bankruptcy to discover if it could be the appropriate path for you to take.
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Bankruptcy FAQs
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Personal Bankruptcy in Canada
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