When it comes to filing for bankruptcy, it may seem like you have to learn a whole new vocabulary when all you want to do is get out of debt. Feelings of frustration are understandable, and we’re here to help. For starters, we will explain the difference between a bankruptcy lawyer and a licenced insolvency trustee.
Licenced Insolvency Trustee
In most cases, your bankruptcy filing will be handled by a bankruptcy trustee, more accurately known as a licenced insolvency trustee in the province of British Columbia. In Canada, a trustee in bankruptcy is licenced by the federal government. Their role is to carry out specific types of filings to help their clients negotiate with creditors and to oversee the sale and distribution of assets going towards that debt.
Bankruptcy Lawyer
Bankruptcy lawyers deal almost exclusively with commercial bankruptcy filings, i.e., businesses and corporations filing for bankruptcy. In Canada, bankruptcy lawyers have highly specialized training and education in insolvency law. Lawyers advocate on behalf of their clients to contest the positions of the opposing counsel; a skill that is important when dealing with a business with hundreds or even thousands of creditors.
Do You Need a Bankruptcy Lawyer or a Licenced Insolvency Trustee?
In most cases of personal bankruptcy, the circumstances are pretty straightforward: an individual is insolvent (i.e., owes more than $1000 with little or no recourse to pay it back) and there is a documented history of their creditors trying collect on that debt. In other words, there is not much room for argument. When put in these terms, it is easy to see why a bankruptcy lawyer is not the usual starting point for personal bankruptcy filings.
If you are an individual getting out of debt, the professionals who will best help you are licenced insolvency trustees. In the unlikely event that further legal counsel is required, the trustee working on your case will help you better understand why, and what you need to do next. In some cases, you may be able to avoid filing for bankruptcy altogether with alternatives like credit counselling and consumer proposals.
The professionals at D. Thode and Associates are here to help you navigate the waters of getting out of debt. From our offices in Kamloops and Kelowna, we can serve clients from all over Interior BC.