It used to be that the individuals authorized to administer bankruptcies in Canada were called “Trustee in bankruptcy” or “bankruptcy trustees.” But this designation was recently changed by the federal government to Licensed Insolvency Trustees (LITs).
Why the change? Let’s explain it by breaking down the name into its various parts.
Licensed
By using this term, the government makes clear to the Canadian public who is authorized to provide insolvency services under the BIA. LITs are the only professionals licensed and regulated by the federal government to provide such services to debtors through the Bankruptcy and Insolvency Act (BIA). The Office of the Superintendent of Bankruptcy (OSB) is the body that is responsible for licensing, overseeing, and controlling insolvency in Canada.
Insolvency
Bankruptcy is one of the options available to help with debt problems or to help when someone is insolvent, which means they are unable to pay their debts as they become due. Unfortunately, the word bankruptcy generally carries with it a negative connotation, despite the fact that many individuals are not truly familiar with the actual process. By replacing bankruptcy with insolvency, we remove this stigma. What’s more, Licensed Insolvency Trustees, LITs, offer more than just bankruptcy as a form of debt relief, insolvency is a better descriptive term for their services.
Trustee
LITs administer bankruptcies and Consumer Proposals, receiverships and debt relief options under the Bankruptcy and Insolvency Act. LITs are strictly regulated and have rules to follow, which helps to ensure that they carry out their services in a fair and equitable manner.
How Do Licensed Insolvency Trustees Compare to Debt Counselors?
To become a LIT, one must take a series of courses about bankruptcy and insolvency, pass examinations, and gain real-world experience by working with a practicing LIT for a period of time. LITs are strictly regulated by the OSB to ensure they are qualified and represent your best interests, and must adhere to ethical standards as well. With respect to their fees, they are limited in what they can charge and their initial consultation is usually free.
Unlike LITs, debt counselors are unregulated by the OSB and are not authorized to administer Consumer Proposals and bankruptcies. They do not have to undergo formal training or even have a background in debt management, let alone such work experience under their belt. When it comes to fees, they have few restrictions and typically charge for their services up front. Often, they will charge simply to refer you to a LIT.
3 Tips to Help You Find the Right Debt Relief Professional for You
LITs, debt counselors, credit counselors… There are many professionals out there offering their services to help you eliminate your debt. With so many options, it can be confusing to know who to turn to for the best, unbiased financial advice. The below tips may help you in making your choice.
- Look at your financial circumstances and try tracking your spending and making a budget. This will not only give you a realistic view of your situation, but you may even be able to solve your financial problems once you know where your money is going. Knowledge is power.
- Do your research. Before picking up the phone to schedule a consultation, check out the professional’s website, bio, qualifications, and years of experience. Determine whether they are licensed or accredited, and whether there is any government or other body monitoring them. Unless they are licensed as an LIT and regulated by the Federal Government Of Canada it can be difficult to tell an accredited company from a clever marketer.
- At the initial consultation, make sure your professional gives you a list of all your available debt relief options so you can make an informed decision. These may include help putting in place a workable budgeting, debt consolidation, debt settlement, a debt management plan, or a Consumer Proposal or even bankruptcy.
Contact a Licensed Insolvency Trustee Today
If you are looking for debt relief and aren’t sure where to turn, your best first option is a Licensed Insolvency Trustee. It isn’t just bankruptcy we can help you with. We offer the full range of debt relief services. At your free initial consultation, we’ll review your financial circumstances and discuss all available debt relief options. We’ll even give you our unbiased, seasoned advice on which solution may be best for you and your family. Contact us today. We look forward to hearing from you.
Photo by Glenn Carstens-Peters on Unsplash
