Debt problems? You need to speak to a Licensed Insolvency Trustee

If you are looking for Bankruptcy Trustees in Canada, you have a long search ahead of you. They’ve gone. Or rather, they haven’t gone, they’ve been renamed. For help with debt issues and advice on bankruptcy and insolvency issues, you now need to speak to a Licensed Insolvency Trustee.

Why the change from Bankruptcy Trustee to Licensed Insolvency Trustee?

It’s some time since the name change, which The Office of the Superintendent of Bankruptcy (OSB) made effective on 1 April 2016.

The OSB is the body responsible for the regulation of insolvency in Canada, and as such, it licenses, controls, and monitors licensed insolvency trustees. Its ultimate role is to make sure that everyone – creditors and debtors – are treated fairly in their financial matters.

Prior to the name change, the industry had become concerned that people who needed the services of Bankruptcy Trustees were instead being advised by the wrong people. For example, they were speaking with debt consultants who, by law, cannot do the work that is needed. A debt consultant cannot stop a wage garnishment; a Licensed Insolvency Trustee (LIT) can.

This confusion came about primarily because Canadians:

  • Weren’t aware that bankruptcy trustees covered a wide range of insolvency and debt services
  • Have a strong negativity against the word bankruptcy

So, the industry, through bodies like the Canadian Association of Insolvency and Restructuring Professionals (CAIRP), lobbied for a more descriptive title. And the CAIRP was able to show evidence that supported a name change:

  • A poll discovered that Canadians trust licensed professionals, but six in 10 mistakenly believe that employees of debt settlement and credit counselling companies are licensed debt relief professionals.

The name change to ‘Licensed Insolvency Trustees’ makes it clear that the associate you are speaking to is licensed to provide advice and action on all the options available, not only bankruptcy.

How does a Licensed Insolvency Trustee become licensed?

It’s difficult to become an LIT. You must take a series of courses and pass written and oral exams. You must also be employed by a trustee who will supervise your work to ensure that you are both qualified and competent. In this regard, becoming an LIT is like becoming a lawyer or a doctor. Failure rates are high – around three in four entrants fail either the written exams or oral exam.

What this means is that when you consult with a LIT, you can be certain that they know their stuff and will do the best job possible for you.

Why is it important to work with a Licensed Insolvency Trustee?

A debt consultant will suck you in by making sure you know they don’t do bankruptcy. And, of course, because of the negativity surrounding the word bankruptcy (negativity that is generally mis-placed), you go along to get your debt problems solved without that fear. The thing is, debt consultants cannot solve your debt issues. For example, they cannot legally do a consumer proposal.

A LIT works with you and your creditors to come to the best solution. This may be by way of:

When you work with a LIT, you can be certain that the law will be applied fairly. They will explain everything in terms you can understand, and discuss the implications of every option available to you.

All bases covered, by law

This is perhaps the most important aspect of working with an LIT. By law, a Licensed Insolvency Trustee must discuss all your options with you, including consumer proposals and bankruptcy. It may be (in fact, it often is) that what you really need is someone to help you assess your financial situation and provide some honesty and clarity to personal financial management.

So, if you have debt issues, you don’t need to speak to a bankruptcy trustee. You probably never did. But you do need to speak to a Licensed Insolvency Trustee. Contact Debt Help BC to get the best advice tailored to your personal circumstances.