How a Licensed Insolvency Trustee Can Help with a Bankruptcy or Consumer Proposal

What is a Licensed Insolvency Trustee? 

If you are struggling with debts, you may have browsed online and come away with a sense of confusion. You’ve read that a Trustee is involved if you file for bankruptcy, but you are not sure of that person’s role. You may also have seen the same professional called a Trustee, a Bankruptcy Trustee, or a Licensed Insolvency Trustee. All of these terms refer to the same professional. 

In Canada, Bankruptcy Trustees Are Now Licensed Insolvency Trustees

As of 2016, Bankruptcy Trustees in Canada have been renamed Licensed Insolvency Trustees, as they deal with more than just bankruptcies. Newer articles online often use this more descriptive name in addition to simply calling them Trustees.

Licensed? By whom?

A Licensed Insolvency Trustee, or LIT, is licensed by the federal government (specifically, by the Office of the Superintendent of Bankruptcy). A Licensed Insolvency Trustee is the only professional authorized to file consumer bankruptcies and consumer proposals. You need a Licensed Insolvency Trustee to assist you with these insolvency solutions, but they can also advise you on other debt solutions.

I Have a Debt Problem, and It Might Be Serious - How Do I Start?

The first step, which you have already taken, is to recognize or suspect that you have a debt problem.

Here are a few signs that you can benefit from talking to a Licensed Insolvency Trustee:

• You have so many credit account bills that you have difficulty keeping track of their payment dates
• The amount you must pay in minimum monthly credit payments is becoming overwhelming
• You have opened new credit accounts to help make payments on other credit accounts
• You have missed payments on some of your credit accounts
• You avoid answering your phone in case it is a credit company or collection agent calling
• You have been denied new credit
• Your debt situation is causing you to experience anxiety or to lose sleep

If you have experienced one or more of these signs, a Licensed Insolvency Trustee can advise you on how to make things better.

What Happens When I See a Licensed Insolvency Trustee?

You may be a little uneasy with the idea of laying out your situation for a professional. After all, up until now, you have likely believed you’d be able to solve the problem yourself through better money management, a better job, or a windfall. It’s hard to make the decision to seek assistance. Licensed Insolvency Trustees understand this.

Tip: Most people who see a Licensed Insolvency Trustee wish they had done so sooner!

Here are some encouraging aspects of meeting for the first time with a Licensed Insolvency Trustee:

Your first meeting is free of charge, and there is no risk or obligation

It’s true: the first time you see a Licensed Insolvency Trustee, the meeting is free of charge. This is a chance for you to meet them, discuss your situation in general terms, and see if you and the Licensed Insolvency Trustee are a “good fit.”

You are in the driver’s seat regarding how you proceed. They might talk to you about bankruptcy, consumer proposal, or other debt solutions, but you are not obliged to pick an option or to take action right away.

If you feel you have a good relationship with them, and if bankruptcy or consumer proposal is the best option, you may decide to continue your relationship with the Licensed Insolvency Trustee and ask them to handle that process with you.

Note that if you are proceeding with bankruptcy or consumer proposal, the government-regulated fees for future Licensed Insolvency Trustee services after your first meeting are typically rolled into the payments for the bankruptcy or consumer proposal itself.

At this first meeting, you will learn a great deal about your options for going forward

If you bring along some information about your financial situation to discuss with the Licensed Insolvency Trustee at your first meeting, you will have a productive discussion that will include possible options for moving forward into a better financial future.

Even if you don’t have your numbers handy, the Licensed Insolvency Trustee can describe various debt solutions that might fit your situation.

Licensed Insolvency Trustees are experts on consumer debt solutions. In addition to bankruptcy and consumer proposal, a Licensed Insolvency Trustee can advise you on the possible benefits of debt consolidation, credit counselling, and other strategies.

Your meeting is confidential

You may rest assured that the Licensed Insolvency Trustee will not share your personal or financial information with anyone.

You will not be judged

This is an important point when making the decision to share your financial concerns with a professional. Licensed Insolvency Trustees are not just experts in resolving consumer insolvency (the inability to pay all your bills as they become due), but they are also well aware of the common causes of this situation.
A Licensed Insolvency Trustee will fully understand your position, and knows that unexpected life events happen that result in situations where your expenses exceed your income. They know that insolvency can happen to virtually any consumer.

Next Steps with a Licensed Insolvency Trustee

If you decide to hire the Licensed Insolvency Trustee to assist you with a bankruptcy or consumer proposal, you’ll meet again to provide complete information to the them on your debts, and on your income and assets. They'll describe the process to you, and will prepare the paperwork that goes to the Office of the Superintendent of Bankruptcy. There will be a few decisions to make along the way, and th will guide you through the process.

Meeting with a Licensed Insolvency Trustee Is Your First Step Towards a Better Financial Future

Consumer proposal and bankruptcy are robust insolvency solutions, intended to give insolvent consumers a fresh financial start.  If you’re feeling overwhelmed by debt, contact MNP for a Free Confidential Consultation today. Together, we’ll address whatever financial challenges you’re facing and move you toward a better financial future.