Do I Need a Bankruptcy Lawyer?
What is the difference between a Bankruptcy Trustee and a Bankruptcy Lawyer in Edmonton & Northern AB?
If you are asking about filing for personal bankruptcy, then the answer is NO. In Canada, bankruptcy lawyers are unable to administer bankruptcy or consumer proposal filings. This differs from the American system, which undoubtedly causes some confusion. In Canada, bankruptcy lawyers deal almost exclusively with corporate business cases. For personal insolvency, you will want to contact a Licensed Insolvency Trustee (LIT). LITs receive several years of specialized training in debt resolution and have been granted a federal license to administer debt settlement. At Goth & Company, your initial consultation with a Licensed Insolvency Trustee is free. Your LIT will review your financial situation and explain your options. They will offer their professional advice, but you decide how you want to proceed. When you make that decision, your Licensed Insolvency Trustee will start the process. LITs have a legal obligation to make sure that you have all the facts and that all clients and parties are treated fairly and in accordance with Canada’s laws. If you need debt help, talk to a Licensed Insolvency Trustee.
Licensed Insolvency Trustees have a legal obligation to you
A Licensed Insolvency Trustee will be able to answer all your questions. Canada’s insolvency laws are complex. We’re here to reduce your stress by telling you all the facts and helping you get out of debt. LITs are designated officers of the court and have a standard of fairness and transparency to uphold. The Office of the Superintendent of Bankruptcy (OSB) is responsible for granting licenses and ensuring that all LITs follow the rules and regulations of the Bankruptcy & Insolvency Act (BIA).
So, what is the Bankruptcy & Insolvency Act (BIA or Bankruptcy Act)?
The Bankruptcy and Insolvency Act is federal legislation that encompasses all the rules and regulations pertaining to consumer proposals, bankruptcy, and receiverships. The BIA will essentially determine what your options are for formal debt settlement. The Office of the Superintendent of Bankruptcy (OSB) ensures that all matters related to insolvency follow the laws of the Bankruptcy Act. Licensed Insolvency Trustees take three-year courses in which they learn the rules of the BIA. In order to obtain a federal license from the OSB, LIT candidates must pass several written and oral exams. The Bankruptcy Act is particularly important because it protects the rights of all parties and sets a standard of practice for both trustees and the courts.
Another benefit of the Bankruptcy Act is that it makes it possible to settle debts without being required to appear in court or hire a lawyer. For first-time bankruptcies where there is relatively low income, you can generally anticipate an automatic discharge within approximately 9 months of the time you filed for bankruptcy in Alberta.
Do we have bankruptcy lawyers in Canada?
The answer is yes; however, bankruptcy lawyers in Canada are simply professional lawyers who specialize in certain areas of insolvency law. They are not legally able to file consumer proposals or bankruptcy according to the Bankruptcy Act. Instead, bankruptcy lawyers serve clients who need legal representation in adversarial cases, and mostly for corporate insolvencies. With personal bankruptcy, there is rarely a case to argue as it is a relatively simple matter of repayment for debts owed. Corporate bankruptcies and insolvencies have more stakeholders and can be more complex. This is where Canadian bankruptcy lawyers focus their attention. Their role is to provide legal defence and advocate for their clients. A LIT may consult a lawyer if there is a dispute or discharge hearing for a personal bankruptcy case. However, this is quite rare. For personal bankruptcy, you do not require a bankruptcy lawyer.
Instead, a Licensed Insolvency Trustee has the knowledge and resources to help you through every step of your debt resolution. Canadian bankruptcy lawyers do not have the legal authority to file the necessary documents to initiate the bankruptcy or consumer proposal process. The way debt settlement is currently set up in Canada is designed to save you money by avoiding lawyer fees. The costs and fees associated with bankruptcy are stipulated in the BIA. Your first appointment with a Licensed Insolvency Trustee is generally free, and any subsequent fees are regulated to ensure fair and reasonable rates. By meeting with a Licensed Insolvency Trustee, you could be saving yourself considerable time and money. Bankruptcy is usually the last resort, and at Goth & Company, we always look for other solutions first.
Licensed Insolvency Trustees Instead of Bankruptcy Lawyers
Many licensed Trustees held a degree in finance or accounting and worked in a related field for a number of years prior to becoming Licensed Insolvency Trustees. They must enroll in three-year-long bankruptcy and law courses followed by written and oral exams. The exams are brought before a panel, which includes a representative of the OSB, a bankruptcy lawyer, and a Licensed Insolvency Trustee. The licensing exams are very challenging, and only a small percentage pass the first time. The strict guidelines around licensing ensure that every LIT has a strong understanding of the Bankruptcy & Insolvency Act. LITs are the only professionals in Canada legally qualified to administer consumer proposals and bankruptcy. Debt resolution is simply not within the scope of practice of a bankruptcy lawyer.
Within the Bankruptcy & Insolvency Act, there are two options when it comes to personal debt settlement: consumer proposals or bankruptcy. Consumer proposals are currently the top choice for debt relief in Canada. Proposals offer a great alternative to bankruptcy. They allow you to keep your assets and repay as little as 30% of what you owe, with no interest. Your Licensed Insolvency Trustee can file either type of debt resolution.
Licensed Insolvency Trustees (LITs) have the knowledge and resources to:
- Assess your financial situation and the circumstances that led up to your insolvency
- See if you are eligible for any alternatives to bankruptcy
- Provide financial advice and counselling
- Find an answer all your debt-related questions
- Review all your claims and address and any invalid claims against you
- Work in direct accordance with the Bankruptcy & Insolvency Act
When you have decided how you wish to proceed, you will schedule a second meeting with your Licensed Insolvency Trustee who will then begin the process of:
- Promptly informing your creditors of your move
- Conduct a comprehensive review all your creditor’s existing claims against you
- Prepare and all necessary documents to be filed to the Office of the Superintendent of Bankruptcy
- Guide you step-by-step through the debt resolution process, so you know what to expect
- Distribute of assets held in trust, as outlined by the Bankruptcy Act
- Ensures you complete all your mandatory duties
- Apply for your discharge
Licensed Insolvency Trustees have a legal obligation to ensure you have all the facts so that you can make an informed decision about your financial future. At Goth & Company, your initial meeting with one of our LITs is free. You are under no obligation. We simply want you to have all the facts. You will decide on your next steps and how you wish to proceed.
Still have questions about Bankruptcy Lawyers or who to see for your unique financial situation?
The rules and regulations surrounding insolvency are complicated, and you may still have questions about the role of bankruptcy lawyers vs. Licensed Insolvency Trustees. Of course, the most significant difference is that lawyers in Canada are not licensed to administer bankruptcy or consumer proposals, plain and simple. Consider the following:
- Unable to afford your debt? Have you recently thought about declaring bankruptcy and want to know your options? You need to talk to a Licensed Insolvency Trustee.
- Are you unable to make your scheduled payments? Are in angry creditors threatening legal action? You need to talk to a Licensed Insolvency Trustee.
- Do you owe Canada Revenue Agency a considerable sum of money? Is the CRA threatening wage garnishment? You need to talk to a Licensed Insolvency Trustee.
- Maybe you just feeling burdened and overwhelmed by debt and unsure of what to do next? A Licensed Insolvency Trustee can help.
- Maybe you are a creditor who’s looking for information on debt settlement proceedings? If so, you may want to consult a bankruptcy lawyer.
Finding a positive solution to insolvency
At Goth & Company, we do everything we can to ensure that you know what your options are. Bankruptcy is usually a last resort, and we will review any available alternatives with you. Your first appointment is a free consultation session. During this consultation, a Licensed Insolvency Trustee will discuss your finances and present all available options to you. We have answers to all your debt-related questions and will provide you with the information you need to make an educated decision. There is no obligation or pressure. When you are ready to get move forward, we will meet with you again to get the process started.
Debt help that you can count on!
With over 30 years of experience, Goth & Company has helped thousands of people across Alberta through their debt challenges. From debt counselling to bankruptcy and everything in between, we are here to put you on a path where you can become free of debt. Your information is entirely confidential. We will review all your options and give you our honest professional recommendation. If there is an alternative to bankruptcy, we will find it. You will be given all the facts about all the possible solutions to the problem. In some cases, bankruptcy is the best or quickest option. We understand that life does not always go as planned, and that’s why we will be there with you every step of the way. Getting help with filing for a proposal or bankruptcy or debt relief is as easy as calling 1-403-265-HELP (4357), and it doesn’t cost anything! Call us today! 780.435.5110