A bankruptcy trustee can help you resolve your debts and recommend the best debt relief option based on your circumstances.

This article looks at the role of bankruptcy trustees in providing debt advice to Canadians who are in financial difficulty.

What is a bankruptcy trustee?

A bankruptcy trustee or trustee in bankruptcy are terms used to describe a Licensed Insolvency Trustee.

A Licensed Insolvency Trustee is a professional who provides debt advice and services to Canadians. Trustees are licensed and regulated by the Office of the Superintendent of Bankruptcy (OSB).

As an officer of the court, they have the knowledge, experience and expertise to help you solve your debts.

Is a bankruptcy trustee the same as a Licensed Insolvency Trustee?

Licensed Insolvency Trustees (LITS) were previously called “Trustees in Bankruptcy” or “Bankruptcy Trustees.” As of April 1, 2016, the use of the professional designation “Licensed Insolvency Trustee” came into force.

What is the role of a trustee in bankruptcy?

A bankruptcy trustee (or Licensed Insolvency Trustee) is a federally regulated debt consultant that helps you deal with your debt problems.

A Licensed Insolvency Trustee can help you with your financial problems and get you out of debt.

Only a Licensed Insolvency Trustee can administer insolvency proceedings, such as a consumer proposal or personal bankruptcy. No other person or organization can legally file bankruptcy proceedings or a consumer proposal.

Similarly, only a trustee can provide creditor protection that can prevent wage garnishments and legal action against you. This process lets you freeze interest on your debts, stop collections, and even reduce your debt sometimes.

The bankruptcy trustee will assess your financial situation, answer any questions, and recommend the best way to reduce your debts.

While debt consolidation is the best route for some, another debt relief solution might be a better solution for others.

It’s the trustee’s job to figure out how to resolve your debt problems. They will explain the advantages and disadvantages of each option.

A trustee can advise you on how to protect your assets and help with budgeting, benefits and taxes.

Most people do not need to file for bankruptcy to resolve debt issues. A popular way to deal with debt is to make affordable payments to creditors through a consumer proposal.

Who does a bankruptcy trustee work for?

You can think of a trustee in bankruptcy as an umpire or referee. They are responsible for ensuring that your rights and those of your creditors are protected during bankruptcy or a consumer proposal. This includes making sure that everyone is treated fairly.

They ensure that everyone follows the rules under the Bankruptcy and Insolvency Act.

All trustees are licensed and regulated by the Government of Canada’s Office of the Superintendent of Bankruptcy. All trustees must be qualified and adhere to standards of practice, including a code of ethics.

A trustee will never pressure you to accept a particular solution. Instead, they will provide unbiased advice, allowing you to make your own decision.

How does a bankruptcy trustee get paid?

The federal government regulates a bankruptcy trustee’s fees, meaning all trustees are paid the same amount. This ensures affordable debt advice is available to all Canadian citizens from federally regulated, licensed professionals.

If you file a consumer proposal, a trustee’s fees are taken from your payments at no additional cost to you. Bankruptcy costs depend on your income but are subject to strict rules.

An initial consultation with a trustee is free. You do not need to pay to talk to a Licensed Insolvency Trustee.

Why do I need a bankruptcy trustee in Canada?

Under the Bankruptcy and Insolvency Act, only Licensed Insolvency Trustees (formerly bankruptcy trustees) can administer bankruptcy or a consumer proposal.

A trustee can help you reduce your debt by freezing interest on your debts, stopping collection action, and stopping wage garnishments.

This result is that Canadians can access knowledgeable, trustworthy, licensed debt experts under the Licensed Insolvency Trustee network.

A trustee must comply with legislation, regulations and directives and undertake regular audits and inspections. They must be of good character, be solvent, and have the necessary skills and experience.

Beware of companies that try to charge large fees upfront just to refer you to a trustee.

You don’t have to pay to speak with a Licensed Insolvency Trustee or for someone to prepare paperwork ahead of time.

How do I find a bankruptcy trustee near me?

Arrange a free consultation with a bankruptcy trustee (Licensed Insolvency Trustee) near you to begin your debt relief journey.

Trustees are debt professionals who have the knowledge, experience and skills to resolve your debt issues.

Your trustee won’t pressure you into a specific debt solution. A trustee’s advice is completely impartial, and the final decision on how to proceed will be yours.

Using our network of knowledgeable and experienced trustee firms, contact a trustee for a free and confidential consultation.

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