Licensed Insolvency Trustees
(Formerly called Bankruptcy Trustees, prior to April 2016)
What is a Licensed Insolvency Trustee & How Can they Help?
A Licensed Insolvency Trustee 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.
By law you must work with a Licensed Insolvency Trustee when filing bankruptcy.
Trustees are also 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 does a Licensed Insolvency Trustee do for me?
In a bankruptcy process the two main jobs of a Trustee are:
- To sell debtor’s assets, if that is something that is required in that particular case. For example, if the debtor own a house with no mortgage, the Trustee would sell the house, and use the money to repay creditors (the people the debtor owes money to).
- To take whatever money they recover, and distribute it to the creditors at the end of the bankruptcy.
Bankruptcy is an extremely complex process and it is easy to get confused. A Licensed Insolvency Trustee helps through the process and make sure it is done as quickly and efficiently as possible.
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.
What should I do now?
It’s a Trustee’s job to point you in the right direction and help you determine which option is best for you and your family.
If you are struggling with debt, or have collection agencies calling you, or are worried about wage garnishments, we advise you to contact a Licensed Insolvency Trustee for a free, confidential consultation to learn your options. There is no risk, no charge, no obligation, and it can usually be completed in 30 minutes or less.