About Bankruptcy Trustees
I’ve heard that some people get a trustee. Is this a good idea?
Absolutely. Bankruptcy is an extremely complex process and it is easy to get confused. A licensed bankruptcy trustee can help you through the process and make sure it is done as quickly and efficiently as possible.
What is a trustee in bankruptcy?
The website of the Superintendent of Bankruptcy describes trustees in bankruptcy as follows:
A trustee in bankruptcy is a person licensed by the Superintendent of Bankruptcy to administer proposals and bankruptcies and manage assets held in trust. The trustee can give a debtor information and advice about both the proposal and bankruptcy processes and make sure that both the debtor's rights and the creditor's rights are respected.
When you file an assignment in bankruptcy, a trustee is appointed.
What does a bankruptcy trustee do?
The trustee has two main jobs:
- To take your assets and sell them.
For example, if you own a house with no mortgage, the trustee would sell the house, and use the money to repay your creditors (the people you owe money to).
- To take whatever money they recover, and distribute it to the creditors at the end of your bankruptcy.
A person has to use a trustee if he or she goes bankrupt. However, trustees are not just for filing bankruptcy. They are also Professional Debt Consultants and can:
- provide debt counselling
- help you make a proposal to your creditors to avoid bankruptcy
- make arrangements with your creditors on your behalf
- negotiate settlement agreements
If a trustee feels you need the protection of independent legal advice, the trustee will refer you to an insolvency lawyer. In some cases the trustee will be able to advise you of a solution that will cost you nothing and have you avoid bankruptcy.
Why should I rely on a trustee?
Trustees are the most highly trained and educated Debt Consultants in Canada. Almost all trustees have both an accounting designation and a university degree. In addition, all must complete and pass a rigorous three-year bankruptcy and law course and be investigated by the RCMP before being granted a trustee license. Ongoing professional development is mandatory.
In most cases, it will cost you less to use a trustee than other Debt Consultants since trustees have their fees regulated by the government.
Your trustee will explain your duties in detail, to ensure that you complete your bankruptcy as quickly as possible.
When dealing with a trustee you are protected as follows:
- By the fact that the federal government regulates trustees;
- By the stringent code of ethics to which all trustees are subject;
- By the mechanism in place to mediate any dispute you may have.
What should I do now?
Bankruptcy is a complex and confusing legal process and should not be attempted alone. There are numerous bankruptcy options available and selecting the appropriate one could be challenging.
We strongly advise you to contact a bankruptcy trustee in your area, as he or she can point you in the right direction and help you determine which option is best for you and your family. Your first consultation will be free.