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If you’re searching for a Bankruptcy Trustee in Canada, what you’re actually looking for is a Licensed Insolvency Trustee (LIT). In 2016, the Office of the Superintendent of Bankruptcy (OSB) changed the name in order to clarify the role and responsibilities involved.
Before the name change, most Canadians thought that a bankruptcy trustee could only help with administering bankruptcy. However, the scope of the role was much broader because they offered a wide range of debt-relief services. The name change into LIT gives their profession greater regard and helps distinguish them from alternative professionals and businesses who try to advertise themselves as having the same expertise and authority.
In all individual bankruptcy cases, there will be an insolvency trustee leading the case on behalf of the debtor. You will need the assistance of an insolvency trustee if you’re considering filing for a bankruptcy (or consumer proposal). It is mandated by the Canadian government that an insolvency trustee help individuals and businesses looking for debt relief.
The process of filing bankruptcy is complex, and individuals and small business owners cannot go through it without assistance. An insolvency trustee is an educated, experienced, and federally regulated professional who will guide you through everything, help you understand, and make sure everything is done efficiently.
Insolvency trustees are federally regulated by the Office of the Superintendent of Bankruptcy (OSB). Because trustees represent our citizens, OSB is there to make sure that people filling that role are reliable, solvent, honest, and have a good reputation. They are subject to ongoing oversight and must adhere to the Code of Ethics for trustees and other federal standards of practice.
Insolvency trustees are debt solution specialists. They are trained professionals authorised to work with people and help them with solutions to problems such as bankruptcy and consumer proposals
Keep reading to find out more about what it takes to choose a good insolvency trustee, how an insolvency trustee near me can help you, and the most important considerations when choosing an insolvency trustee in the Greater Toronto Area.
What is an Insolvency Trustee?
People seem to confuse the roles of an insolvency trustee (formerly referred to as bankruptcy trustee) and a bankruptcy consultant quite frequently. However, these two roles are essentially different, from the standpoints of education and experience to authorisation to handle proposals and bankruptcies.
Trustees are most often professional chartered accountants with additional mandated financial training and experience. They are financial specialists whose primary duty is to analyse your finances, show all of the potential debt relief solutions, and explain Canada’s insolvency and bankruptcy laws. Trustees are also the only specialists authorised by the government to administer your proposal or bankruptcy.
Bankruptcy consultants are most often lawyers specialised in bankruptcy law. They cannot become insolvency trustees, but can provide you with advice or deal with business files in complicated financial situations. In most bankruptcy cases, bankruptcy consultants are not needed
Studies and Degrees Needed to Become an Insolvency Trustee
List all of the types of schools, degrees and certifications a trustee must obtain before he is licensed to practice
The eligibility requirements for becoming an insolvency trustee are following:
- A person must have a Canadian university degree or five years of experience in the bankruptcy field.
- A person who is a member of a recognized Canadian professional association.
When it comes to minimum qualifications for getting a licence, an individual must:
- have a good reputation
- have not been convicted of an economic or criminal offence from which he or she hasn’t been pardoned.
- be solvent
- pass an Oral Board of Examinations
- successfully complete the courses.
For an insolvency trustee licence, the candidate must complete:
- CIRP (Chartered Insolvency and Restructuring Professional Qualification Program), also known as the CQP (CIRP Qualification Program). The program is offered by the CAIRP (Canadian Association of Insolvency and Restructuring Professionals).
- Insolvency Counsellor’s Qualification Course (offered by CAIRP) in addition to being considered a solvent individual who hasn’t resorted to bankruptcy in the last five years.
Under the Bankruptcy and Insolvency Act (BIA), the Superintendent of Bankruptcy is authorised to grant licences to insolvency trustees. Therefore, the Superintendent evaluates the skills, abilities, professionalism, understanding, work ethic and judgement of the future insolvency trustee. This is done to ensure that the trustee will be able to serve his clients well and will not erode the public trust in the insolvency process.
What Does an Insolvency Trustee Do for You?
Besides being there as a professional support and advisory, an insolvency trustee is a debt-relief specialist licensed by the Canadian government to conduct your consumer proposal or bankruptcy.
A insolvency trustee has several main responsibilities, which are to:
- Help assess your total debt, analyse your financial situation, and present you with all attainable alternatives.
- Prepare the documentation. Your insolvency trustee will meet you on several occasions in order to collect and review all the necessary information. You will sign the bankruptcy documents which will be filed with the Office of the Superintendent of Bankruptcy.
- Notify your creditors about the official start of your bankruptcy process and settlement of negotiations or claims for your proposal.
- Manage the bankruptcy process from start to finish, sell assets that aren’t exempt from seizure, and review claims.
- Ensure that you complete all duties required in your bankruptcy, including the required credit counselling sessions.
- Apply for your discharge.
Top Considerations for Choosing an Insolvency Trustee in the Toronto Area
Licensed Insolvency Trustees are the only people authorised to administer bankruptcy. They are educated for the purpose and highly qualified to deal with such processes. Your attorney cannot file for bankruptcy on your behalf, neither can any private debt consulting company.
If you have started your search for the right insolvency trustee in Toronto, there are several considerations to have in mind to end up with someone you feel comfortable to speak with.
Areas of Bankruptcy a Trustee Specialises In
Before becoming a Licensed Insolvency Trustee, those eligible for the title come equipped with bankruptcy law expertise. Some of them find it exciting that their practises allow them to practice different types of law, such as transactional, litigation, etc. On the other hand, some practitioners choose one specific area of bankruptcy law to specialise in.
The most notable split is between:
- Corporate (or transactional) work; and
- Litigation
Litigators often start out with a general commercial practice, but later find out that bankruptcy litigation offers a more civil and collegial practice. Others might decide to focus on transactional areas of bankruptcy (i.e., financing and acquisitions).
Some trustees decide to become super-specials, working in a niche within a niche, such as a bankruptcy tax practice, environmental law, etc. Be sure to choose a trustee that has experience and skills to deal with your particular case.
Education and Legal Licence to Practice
To become a Licensed Insolvency Trustee, one must do the following:
- Complete the Chartered Insolvency and Restructuring Professional Qualifications Program. CAIRP (Canadian Association of Insolvency and Restructuring Professionals) is a non-profit organisation responsible for the program. They help develop courses and train trustee professionals to build their integrity and provide a high standard of care. There are three courses a future trustee must complete in order to receive a licence, and they take two years to complete.
- Pass the Oral Board Exam. A candidate that has all the prerequisites can apply online for an invitation to attend the exam.
But you still need to make sure that the insolvency trustee you’re about to meet has his or her licence. All trustees must have their Federal Government licence, which is why it is important to confirm that you aren’t dealing with an unlicensed consultant who can only hand out some advice regarding your bankruptcy case.
Asking them if they are licensed before meeting them will save you money and time.
Customer Reviews and Success Stories
A successful insolvency trustee is someone who helps people in debt file bankruptcy. This takes a huge burden off of people’s backs, so it’s only natural for them to give a review of the services they received.
Be sure to check the Internet for any endorsements, testimonials, or reviews that have been submitted by both satisfied and dissatisfied clients. An increasing number of people are turning to online reviews when it comes to finding and evaluating insolvency trustees, mostly younger clients who are familiar and comfortable with online reviews.
Read through anything you can find because it will provide assurance that you are working with a reputable and reliable professional.
Costs of an Insolvency Trustee
Insolvency trustees in Canada don’t receive funding from your creditors or the Canadian government. That is why you will need to pay a base contribution, and most trustees require their clients to pay each month that they are bankrupt.
The average base contribution across Canada is about $200 per month. Depending on your situation, it could be more or less. For example, if you are self-employed and your financial situation is more complicated, you might have to pay a higher base contribution. This money is required for your trustee to cover the basic administrative expenses.
As for your insolvency trustee’s fees, there is a set of rules and calculations that they must follow when administering bankruptcy. Their fees are drawn from the funds that have been paid into each individual consumer proposal or bankruptcy proceeding. A licensed trustee is not allowed to set their own rates and fees, but strictly follow the tariff determined in the Bankruptcy and Insolvency act..
What Should You Expect From an Insolvency Trustee?
Remolino & Associates earned their insolvency trustee licence in 2014, and have a proven track record of success in helping with bankruptcies and consumer proposals.
Our clients decided to put their financial faith in our hands because we always manage to consider all available options to reorganise our clients’ financial reality. We understand that there is a human story behind each debt problem and that lifting such weight off one’s shoulders means much for physical and emotional wellbeing.
H2: Book A Free Virtual Consultation
Remolino & Associates are experienced Licensed Insolvency Trustees with extensive financial knowledge.
In addition to running the trustee practice, we also provide help with other debt solutions (e.g., student debt, tax debt, small business debt, etc.), budgeting, and money management.
Feel free to visit the Remolino & Associates website to learn more about our practice. You can also book a virtual appointment to discuss your financial affairs with us. Help us understand the reason behind your financial problems, and we will tailor an individualised solution for it.