This is a question we are often asked. If you’ve been researching online about debt relief options, you may have come across information from debt consultants, advertising that they will represent you (the debtor).
Frequently, they claim that a Licensed Insolvency Trustee (“LIT”, formerly known as a Bankruptcy Trustee) only looks out for the interests of your creditors. This is not the case at all.
First and foremost, LITs are officers of the court and are licensed by the Federal Government to administer the options legislated by the Bankruptcy and Insolvency Act. As such, LITs are held to an extremely high standard.
By contrast, debt consultants are unlicensed and unregistered. Debt consultants tend to charge a substantial fee up front, only to then refer you to the LIT of their choice. LITs are the only professionals authorized to file or administer a bankruptcy or consumer proposal. Debt consultants cannot do this.
A LIT’s job is two-fold.
Firstly, we must ensure that debtors are aware of their options, what protections they can receive including stopping garnishments and other collection activity, and what their responsibilities are, so that they can successfully complete a bankruptcy or consumer proposal.
Secondly, we are responsible for collecting money and, where applicable, realizing assets owned by the debtor, to maximize recovery for the creditors, and to distribute those funds in a fair manner according to the law.
The LIT ensures that all stakeholders follow the rules and understand the process.
People facing financial difficulty are often fearful or nervous about seeking advice from a LIT, but ultimately, we are the best professionals to seek advice from. We are required by law to advise you of all your options, and to ensure that you have all the information you need to make the best decision, based on your own individual set of circumstances.
Talk to a Licensed Insolvency Trustee at D. Thode & Associates Inc.