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A Licensed Insolvency Trustee (LIT) is licensed and regulated by the OSB (Office of the Superintendent of Bankruptcy) to administer consumer proposals. They work with clients (debtors) by offering financial advice, helping them understand the consumer proposal process, and managing the entire process from start to finish.
To find the right Licensed Insolvency Trustee in Toronto who will help you resolve your financial hardships, you can resort to:
- Browsing through the Internet
- Speaking to bankruptcy firms and non-profit debt counselling organisations
- Asking friends and family for referrals
Consumer Proposal Near You- How to Find the Right Person to Handle It in Your Local Area
Individuals cannot file their consumer proposals themselves. They need assistance from a person educated and experienced in bankruptcy law and authorised to do it in their name – a Licensed Insolvency Trustee.
Before you even begin the process of creating and filing your consumer proposal, you must sit down with your LIT (whether in-person, by phone or video) and share the details of your financial problems. Then, they will help you determine whether a consumer proposal is the right solution for you, and draft the best possible proposal that works for all parties involved.
The first thing you need to nail down right is to find a Licensed Insolvency Trustee in Toronto. Let’s get down to the specifics and explain the most important things to consider when choosing the right LIT.
Understanding What a Consumer Proposal Is
In Toronto, filing a consumer proposal has become one of the most popular debt consolidation options because incomes and home equity are higher in the city area. Consumer proposal is a legal process (regulated by the Bankruptcy and Insolvency act) between you (the debtor) and your creditors. The aim of the process is to agree to pay your debt in monthly instalments over a five year period. The amount of money you’ll be required to pay back depends on your assets and income.
A Licensed Insolvency Trustee is the only person able to arrange and manage your consumer proposal process. Most Trustee’s require the monthly payment to start upon filing the consumer proposal. Once your creditors accept your consumer proposal, you can continue paying the remaining balance.
How Does a Consumer Proposal Work in Helping You?
The following are the most prominent benefits of filing for a consumer proposal:
- You can repay your debt in monthly instalments over five year period;
- You can decide what you will offer to your creditors according to what you can afford to pay;
- You will probably repay only a part of what you owe (sometimes, creditors agree to a forgive up to 70% of debt);
- You will probably keep your assets (e.g., home, car, nad RRSPs) but you’ll be required to keep making loan payments for them;
- Once the consumer proposal is filed, interest charges stop;
- Your creditors will stop their collection efforts and won’t try to garnish your wages.
The types of debt included in consumer proposal include:
- Personal loans
- Lines of credit
- Credit cards
- Payday loans
- HST – Sales Tax collected and remitted by businesses
- Income tax debts
- Student loans (an individual must be out of school for at least 7 years)
If filing a consumer proposal, you must hire a Licensed Insolvency Trustee to help you. This means that you will not be involved in the proceedings and processes of your consumer proposal. LITs also provide other essential services for debt resolution, such as:
- Debt settlement agreements
- Negotiation with creditors on your behalf
- Preparing counselling for creditors
- Debt counselling
Since LIT fees are under government regulation, they cost less than other types of financial consultants. This means that visiting one is your best starting point for is there are debt problems to deal with and you don’t know where to turn for help. At Remolino and Associates Inc. we offer a free initial consultation to assess and discuss your options.
Top Considerations for Choosing to File Consumer Proposal Near You
When working with a Licensed Insolvency Trustee, there are certain ethics and laws in place which are designed to protect you. Debtors are protected by government regulations and a strict code of ethics to which LITs must adhere.
However, there are certain things that you should keep in mind when looking for the right LIT for your financial situation. Some debt relief companies out there may offer financial consultations but aren’t licensed for administering consumer proposals. This may lead to spending money and time on the wrong professionals.
Companies or Legal Entities You Owe To
The first answer you need in order to proceed talking to a Trustee is – are you licensed? After you get that out of the way, it’s time to discuss their specialisations. LITs come from an accounting background, but many of them decide to specialise in certain areas such as – litigation, corporate work, tax law, environmental law, financing and acquisition, etc.
What kind of LIT you need depends whether you’re filing a consumer proposal as an individual or business. Second, what type of debt do you have? It will determine whether you need a Trustee who’s an expert in dealing with student debt, personal debt, credit card debt, etc.
Ask questions about their specialisation until you feel comfortable enough to believe that you’ve found the right person who understands your problems and is confident when presenting you with debt relief options.
Finding a Local Person to Help With Filing a Consumer Proposal
There are several ways to find a Licensed Insolvency Trustee near you:
- A thorough Google search. Just type in “bankruptcy trustee in Toronto” or “licensed insolvency trustee in Toronto” and hit the search button. Be mindful about the companies that appear in the top search results because they engage in paid promotions that places them at the top. Scroll down through the first 2-3 pages to find other trustees who don’t focus that much on sales.
- Browse a LIT database. There is a searchable database of all LITs in Canada, maintained by the Government of Canada. Use it to search for a local Licensed Insolvency Trustee to help with your consumer proposal.
- Ask for a referral. You can ask your family members, friends, acquaintances, or a non-profit credit counselling company. Some of them will probably have an idea for who the best trustees are, especially the non-profits because they are neither paid on commission nor want to sell you anything. This makes them the most objective places to find all about debt relief opportunities.
Customer Reviews and Success Stories
If someone cannot provide proof of their licensed status, the best advice is to avoid working with them because they are probably not licensed. You can also check their status by visiting the OSB website and searching for a LIT near you.
Whichever website you land on when researching, be sure to check whether it’s specified they are licensed. Also, you should try to find some reviews or testimonials online. Go back to Google and type in their “name + client testimonials and reviews” to find what their former clients think of their services. Did they administer a consumer proposal without involving the client into the complex processes? Did they feel comfortable with the trustee? Were they able to rebuild their financial lives once their proposal was accepted?
Positive reviews and testimonials are an important indicator of one’s reputation. It shows you whether it’s safe to trust them or continue your search if there are many negative reviews. Licensed Insolvency Trustees are held to a high standard and can even lose their licence depending on the frequency and severity of their errors.
Costs of Filing a Consumer Proposal
The first consultation with a Licensed Insolvency Trustee is free and your LIT will use that time to review your situation before suggesting viable solutions. They will consider all alternatives, because there are other ways to manage your out-of-control debt without making any drastic moves.
LITs are paid through the process of payments that you (the debtor) will make over time once a consumer proposal is accepted. They typically receive 20% of your future payments, all in accordance with the general rules of insolvency and bankruptcy. LIT’s fees are determined by the Bankruptcy and Insolvency Act. Funds are held in trust – trustee and government fees are paid from the funds, while creditors receive the balance.
Filing a consumer proposal in Toronto will cost you $1,500, plus 20% for creditor distributions, along with other applicable taxes and disbursements. It is important to note that these fees are included in the monthly payment of the proposal, so they are not an additional cost to the debtor.
What Should You Expect When Looking to File a Consumer Proposal Near You?
Add your sales pitch here about why your bankruptcy and debt relief services are the “best option”. You don’t need to say “we’re the best”, you can say “our clients are living much better lives since they chose us to deal with their bankruptcy” (or something to that effect).
We know that people’s fears and anxiety feed on ignorance. If we take into account that most people don’t know much about the consumer proposal process, it explains why many of our clients come to us anxious about the whole procedure.
Remolino & Associates is there to help you fight that pressure off by helping you understand and being knowledgeable, informative and open. After one meeting with us, you won’t be afraid about how much debt you are in and whether you are going to be stripped of every cent.
Besides consumer proposals, we can also help with debt consolidation, debt management, student debt, tax debt, small business debt, and filing for bankruptcy.
Book a Free Virtual Consultation
Remolino & Associates are experienced Licensed Insolvency Trustees with extensive experience and skills.
Book a virtual consultation with Remolino & Associates! The consultation is free, confidential, and without obligations. We will discuss your financial issues and, based on your unique situation, will explain your debt solution options to you in everyday language. Let us ease your anxieties and help you get set on your next motivational journey. You can also reach us by calling (416) 792-5599.