Looking for a Bankruptcy Trustee?
Bankruptcy Trustees in Edmonton & Alberta
Are you thinking about filing for bankruptcy and wondering if you should contact a Bankruptcy Trustee? If so, there are a couple of things you should know. For starters, the title of ‘Bankruptcy Trustee’ was changed to ‘Licensed Insolvency Trustee’ in 2016 by the Office of the Superintendent of Bankruptcy. This change was made because many people mistakenly thought that Bankruptcy Trustees dealt only with bankruptcy. The truth is that they are experts in all things debt-related and can actually be one of the best resources to help you avoid bankruptcy. A Licensed Insolvency Trustee (LIT), formerly known as a Bankruptcy Trustee, is trained to evaluate every financial situation and explain every possible option. In Canada, they are the only professionals licensed by the Federal government to offer several different types of debt relief, including consumer proposals. LITs are also the only debt experts with the legal ability to lower your debt and provide protection from creditors. Knowing who to turn to for debt help can have a significant impact on the outcome of your financial situation.
The Bankruptcy Trustee Designation
Now Known As Licensed Insolvency Trustees (LITs)
Prior to the name change, many people were coming to us only after having invested considerable time and money into other ineffective debt management plans. There had been many fundamental misconceptions about the role of Bankruptcy Trustees:
- In general, most Canadians thought that Bankruptcy Trustees only handled bankruptcy filing and administration. They did not know that Trustees offered debt advice and several different types of debt relief. Bankruptcy is usually a last resort, and licensed trustees are best equipped to help you avoid it. If you are struggling with debt, talk to a Licensed Insolvency Trustee to get free professional advice.
- Many Canadians had no idea that consumer proposals are one of the best alternatives to bankruptcy, or that proposals also must be filed by a licensed trustee according to federal law.
- More than half of those interviewed mistakenly thought that debt agencies are under federal regulation and license.
- Most significantly, a lot of people indicated that they were less likely to contact a Bankruptcy Trustee because of the negative association with ‘bankruptcy.’
To address these issues, the Office of the Superintendent of Bankruptcy changed ‘Bankruptcy Trustee’ to ‘Licensed Insolvency Trustee.’ The new name better represents the role of a licensed trustee. It also helped to do away with negative associations to bankruptcy. When absolutely necessary, it is part of a LITs role to administer the bankruptcy. But, we will explore all other options with you first. In some cases, bankruptcy is the only option, and in those situations, it’s an opportunity for a fresh start.
The Meaning Behind the Name
Here’s a helpful breakdown of what ‘Licensed Insolvency Trustee’ means:
- Licensed – anything that is ‘licensed’ is regulated – in this case, both federally and the Office of the Superintendent of Bankruptcy. The OSB is in place as a governing body to ensure that every LIT is held to the same standard of knowledge and expertise. Licensing also qualifies LITs to administer consumer proposals and bankruptcy through the courts.
- Insolvency – the area of specialization – handling matters related to unpaid debt (insolvency). This included phone bills, student debt, credit card, etc. This adds clarification to the role of a Licensed Insolvency Trustee.
- Trustee – they have legally been entrusted as officers of the court who are accountable to the Bankruptcy & Insolvency Act.
More Than Just A Bankruptcy Trustee
If you are unable to manage your debt, consumer proposals are one of the top choices for debt relief in Canada. Consumer proposals offer one of the only types of debt relief that allow you to repay up to 70% less than what you owe. A proposal will consolidate all of your unsecured debts into a single secure monthly payment. Besides repaying only 30% of what you owe, proposals are interest-free, assets are untouched, and you never pay more than you can afford. Basically, you work together with your Licensed Insolvency Trustee to come up with a proposal based on what you can financially repay. Your LIT will handle any negotiations with creditors on your behalf. You also receive creditor protection the moment a consumer proposal has been filed, which puts an end to collection calls and wage garnishment. The term of a proposal can be as short as a few months up to a maximum of 5 years. In order to help set you up for financial success, two debt counselling sessions are mandatory.
What kind of training does a Licensed Insolvency Trustee (LIT) have?
Typically, a licensed trustee will hold a university degree along with a background in accounting or a related field. To obtain a license, they are required to take a three-year law class amongst other field-specific courses. These classes are followed by very challenging written and oral exams, of which only 1 in 4 will pass. The overall passing grade itself is over 70%. A passing grade alone does not guarantee that they will be granted a license. Licensed Insolvency Trustees are considered members of the court, so the screening process is considered very important. Candidates must also undergo a complete RCMP investigation, and the Superintendent of Bankruptcy will also look into their reputation. In particular, the Superintendent will want to know if the new candidate:
- Has a proven reputation that shows good character
- Has successfully passed both written and oral exams
- Has a clean record with the RCMP
- Had any history of being personally insolvent
Even once a license has been granted, a new LIT will be under close monitoring and guidance as they start their new designation. All LITs will receive ongoing training and must abide by their code of ethics. The Office of the Superintendent of Bankruptcy is dedicated to ensuring that every licensed professional is an expert in their field and can get the job done right.
Knowing Your Options Can Make All The Difference
When making important financial decisions, it is essential to have all the information. All licensed trustees are legally obligated to inform you of all options for your financial situation. This ensures that no stone is left unturned. You decide how you want to proceed. Unfortunately, this rule does not apply to debt consulting agencies, which means that there is no way of guaranteeing that you are getting all the facts. They also have no legal power to lower your debt or offer creditor protection. Their rates are also not regulated and can vary significantly between companies. With a LIT, any fees you encounter are regulated, and they will never be a surprise. An initial consultation with a Licensed Insolvency Trustee is always free – it’s also one of the most important appointments you will ever have with your LIT. You might discover that you’ll be able to manage your debt with the help of an accountant. Or your case might be a little more complicated and require a debt relief plan. Either way, a LIT will ensure that you have the full picture.
At Goth & Company:
- Your first consult is free of charge
- Your LIT will explore every possible option with you
- We offer many different solutions to debt problems
- Our LITs are licensed to file consumer proposals
- Our LITs are licensed to file bankruptcy
- What is a Licensed Insolvency Trustee (LIT)?
In Canada, LITs or Bankruptcy Trustees are the only federally licensed insolvency experts. For all questions insolvency-related, they have answers and can always find a solution for every debt situation. LITs are also the only professionals who can legally reduce your debt and offer protection from creditors.
- How is a Licensed Insolvency Trustee (LIT) different from a credit councillor?
Licensed Insolvency Trustees are required to lay out all possible debt relief options. They also receive extensive training before being granted a license. Consumer proposals and bankruptcy can only be administered by a LIT. They are the only professionals in Canada licensed to reduce your debt and offer creditor and CRA protection.
- Will a Licensed Insolvency Trustee (LIT) handle negotiations with creditors?
Because dealing with creditors can be a challenge, your licensed trustee will handle any direct negotiations on your behalf.
- What type of training will a Licensed Insolvency Trustee (LIT) have?
All Licensed Insolvency Trustees undergo several years of intensive courses and exams before they are granted a license from the OSB. The process they go through is notoriously difficult, but ensures that every LIT is an insolvency expert.
- Who do Licensed Insolvency Trustees (LITs) report to?
The Office of the Superintendent of Bankruptcy (OSB) is the governing body for all Licensed Insolvency Trustees. The OSB oversees all matters related to licensing and standards of practice. If at any time a person has an irresolvable issue with a LIT, they can file a complaint to the OSB.
- What About Fees?
At Goth & Company, your first consultation with a Licensed Insolvency Trustee is always free of charge. We believe that knowing your options is a right, not a paid privilege. Knowing your options can make all the difference. You are under no obligation. If you seek further assistance, there may be fees associated with some services, but they will be explained, so you never have any surprise bills. All prices are also regulated by the OSB to ensure fairness.
Want to speak to a Licensed Insolvency Trustee (LIT)? Call 780-435-5110 or 1-800-267-6015 today!