If you’re ready to file a consumer proposal or declare bankruptcy, both must be administered by a federally regulated licensed professional.

This is where a Licensed Insolvency Trustee (LIT or trustee) comes in.

If you want to learn about what a trustee does and how they can help you, this guide will tell you everything you need to know.

What is a Licensed Insolvency Trustee?

A Licensed Insolvency Trustee provides debt advice and services to Canadians with financial difficulties.

Ultimately, a trustee can help you resolve your debt problems, whether it’s credit card debt, defaulted loans, overdue taxes, student debt or something else.

A trustee is responsible for:

  • Administering bankruptcies and consumer proposals.
  • Protecting the rights of you and your creditors.
  • Giving you the best possible financial advice.
  • Helping you alleviate your debts.

Even business debts can be resolved.

The most important thing to know is that a trustee is the only person that can administer government-regulated insolvency proceedings that allow you to be discharged from your debt, such as a consumer proposal or bankruptcy.

Not only that, but only a trustee can offer creditor protection that can halt wage garnishments and legal action against you.

It’s always recommended that you consult a trustee when looking for debt help because they are licensed and regulated by the Office of the Superintendent of Bankruptcy (OSB).

What does a Licensed Insolvency Trustee do?

Licensed Insolvency Trustees have the knowledge, experience and expertise to solve your debt issues and recommend solutions to your problems.

Through a trustee, you can freeze interest on your debts, stop collection action, stop wage garnishments and even reduce your debt under certain circumstances.

During an initial consultation, a trustee will review your situation, answer any questions you have and explain what you can do to alleviate your debts.

With so many debt relief options available, it can be confusing. The good news is a trustee can simplify things and recommend the best option.

From there, they can advise on how to protect your assets and even offer guidance on budgeting, benefits, taxes and more.

If you decide to proceed with a consumer proposal or bankruptcy, a trustee will guide you through the process, help you complete the necessary forms and file your paperwork with the OSB.

At this stage, it’s their job to communicate with your creditors on your behalf and distribute payments to them.

Attending creditor meetings and any necessary hearings is also the responsibility of your trustee.

Lastly, financial counselling sessions are provided that could help you overcome future financial challenges.

Source: The OSB: What is a Licensed Insolvency Trustee?

Why do I need a Licensed Insolvency Trustee?

Under the Bankruptcy and Insolvency Act, only a Licensed Insolvency Trustee can administer insolvency proceedings that allow you to be discharged from your debt while also providing creditor protection.

The result is affordable debt help and advice from federally regulated, licensed professionals for all Canadian citizens.

All trustees are licensed and regulated by the Office of the Superintendent of Bankruptcy (OSB) and must adhere to standards of practice, including a code of ethics.

The OSB ensures that trustees:

  • Have extensive knowledge and experience of insolvency before they obtain a license.
  • Comply with legislation, regulations and directives.
  • Undertake regular reviews, audits and inspections.
  • Adhere to standards of practice, rules and the Code of Ethics for Trustees.
  • Are subject to investigation and possible disciplinary proceedings if someone makes a valid complaint.

A trustee must be of good character, be solvent, and complete the following:

  • The Chartered Insolvency and Restructuring Professional (CIRP) Qualification Program (CQP).
  • The CIRP National Insolvency Exam.
  • The Insolvency Counsellor’s Qualification Course or the Practical Course on Insolvency Counselling.

Trustees must also pass an Oral Board of Examination.

Source: The OSB: How to become a Licensed Insolvency Trustee

A trustee will never pressure you into any particular solution. Instead, they will offer impartial advice based on your circumstances, allowing you to make a decision based on that advice.

How do I appoint a Licensed Insolvency Trustee?

First things first: using our network of knowledgeable and experienced trustee firms, we can connect you to a Licensed Insolvency Trustee in your area.

This is a free and confidential consultation with no obligation to proceed.

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However, that’s not the only way: you can also use the trustee registry if you want to do it yourself.

If you decide to do further research online, be aware that some debt settlement companies try to charge large upfront fees just to refer you to a trustee.

What’s important to note here is you don’t need to pay to speak to a Licensed Insolvency Trustee or for someone to prepare documents beforehand.

Remember: the initial consultation with a trustee is free.

Licensed Insolvency Trustee fees

If you file a consumer proposal, a trustee’s fees are paid from your payments at no additional cost to you. In bankruptcy, the cost depends on your income, and the payment structure can vary.

Regardless, the federal government regulates the fees charged by trustees.

You make your payments directly to your trustee, with the fees collected from these payments before distribution to creditors.

Financial counselling sessions

If you decide to deal with your debts through a consumer proposal or bankruptcy, you must attend two financial counselling sessions. Your trustee arranges these sessions.

There, you’ll learn how to manage your finances better.

You must complete these financial counselling sessions before you are discharged, meaning you cannot eliminate your debts until you finish the program.


A Licensed Insolvency Trustee should be your first call when you need specialist debt advice.

They’re the only professionals that can administer insolvency proceedings such as a consumer proposal or bankruptcy.

A trustee can halt interest on your debts, end creditor action, stop wage garnishments and sometimes even reduce your debt.

If you have debts and don’t know which way to turn, seek free advice from a trustee, learn about the options and make choices that are right for you.

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  • Experienced trustees
  • Local offices
  • Personalized plan
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