The Office of the Superintendent of Bankruptcy (OSB) is a federal agency in Canada that regulates and supervises the country’s insolvency system. If you need to file for a Consumer Proposal or Bankruptcy, it’s up to the OSB to ensure the process is fair, legal, and that everyone follows the rules.
Here, we explain the role of the Office of the Superintendent of Bankruptcy (OSB) and how it regulates the professional standard of Licensed Insolvency Trustees (LITs) in Canada.
What is the Office of the Superintendent of Bankruptcy (OSB)?
The OSB is part of Innovation, Science, and Economic Development of Canada (ISED). The OSB oversees the administration of the Bankruptcy and Insolvency Act (BIA),and performs certain duties under the Companies’ Creditors Arrangement Act (CCAA).
The Bankruptcy and Insolvency Act (BIA)
The BIA governs Consumer Proposals and Bankruptcies for individuals and some businesses. It outlines the rules for each debt relief solution, and the rights and responsibilities of everyone involved in the insolvency process. The BIA is responsible for supervising the Bankruptcy and Consumer Proposal processes from beginning to end.
The Companies’ Creditors Arrangement Act (CCAA)
The Companies’ Creditors Arrangement Act (CCAA) is a federal law that gives businesses with over $5 million in debt the opportunity to restructure to avoid filing for Bankruptcy. For example, a company might try to renegotiate its debt payments with its creditors, look for ways to cut costs, or consider selling to prevent Bankruptcy.
What Does the OSB Do?
In addition to overseeing the BIA and the CCAA, the OSB has several other responsibilities, including:
Maintaining public records of BIA and CCAA filings
The BIA and CCAA record database contains basic debtor information on all of the Bankruptcies and Consumer Proposals registered in Canada since 1978, and all receiverships starting in January 1993.2 It also lists all companies that have been granted protection under CCAA since September 2009, and all petitions recorded at the OSB office.
For a small fee, anyone can search the Bankruptcy and Insolvency Records database. It’s free to view CCAA records.
The regulation of Licensed Insolvency Trustees
It’s up to the OSB to license, regulate, and oversee the conduct of Licensed Insolvency Trustees. The OBS ensures that LITs in Canada are:
- Before an LIT can apply for a license, they have to demonstrate a solid base of knowledge and experience to the OSB. All LITs also have to complete the Chartered Insolvency and Restructuring Professional (CIRP) designation issued by the Canadian Association of Insolvency Restructuring Professionals (CAIRP).
- LITs are required to adhere to a Code of Ethics, which outlines the information that LITs must provide to creditors, conflicts of interest, and how to manage client funds.
- LITs must comply with applicable legislation, regulations, and directives that are put in place by the OSB to protect the public.
- If there’s a concern with a LIT, the OSB will investigate the situation and apply discipline when necessary.
Records and investigates complaints
The OSB is also responsible for upholding the integrity of Canada’s insolvency system. One way it does this is by investigating any complaints against a trustee, debtor, or creditor. For example, if someone complains that a debtor has hidden assets or income from the LIT, the OSB will conduct a review to determine if there has been non-compliance with the BIA or CCAA.
Get Help With Your Debt
If you need help eliminating your debt, a Licensed Insolvency Trustee can work with you to find a debt relief solution. Whether you want to learn about budgeting and credit management or require a formal debt relief solution, a LIT can help. Remember, a LIT is the only professional in Canada who can administer a Consumer Proposal or Bankruptcy proceeding. Here are some of the debt solutions a LIT can offer:
Credit counselling
Credit counselling isn’t a form of debt relief. Instead, it provides an opportunity to improve your financial education and awareness.Your LIT can work with you to understand the root of your money issues and teach you how to budget and manage credit. If you file for a Consumer Proposal or Bankruptcy, you’ll have to participate in mandatory financial counselling sessions.
Consumer Proposal
In a Consumer Proposal, you work with your LIT to create an offer to your creditors to pay off a percentage of your debt, increase the time you have to pay, or both. If your proposal is accepted, you have up to five years to repay your debt. The benefit of filing a Proposal is that you can keep your house and car, provided you continue to make your payments on time.
Bankruptcy
Bankruptcy is often the last resort for Canadians who can’t afford to pay their debt. The purpose of Bankruptcy is to help honest debtors get a second financial chance. You will work with a LIT to complete your Bankruptcy forms and applications. Once you officially declare Bankruptcy, your LIT will sell your assets to repay some of your creditors’ debts. You won’t lose everything as federal and provincial laws exempt the sale of select assets. If you’re discharged from Bankruptcy, many of your unsecured debts will be eliminated.
Talk to a LIT Today
To learn more about the role of the Office of the Superintendent of Bankruptcy, or to discuss different debt relief options, speak to a LIT today. For a free, no-obligation consultation, call our office at 1-800-371-8900 or complete our online contact form. Debt is a solvable problem. We can help!
