What is a LIT and What Can They Do?

^{By Rick Hamilton, Bromwich+Smith Staff | Reading Time: 7 min |1,376 Words | Last update: 2023/07/11}

More often than not, and especially now in this time of financial uncertainty, we hear stories from Canadians struggling with overwhelming debt. Many have lost jobs, lost businesses or are struggling to keep it all together.   

With so many different professionals advertising their financial services, how do you know which one you can trust? How do you choose? How can you get out of debt? Where do you even start?  

Well, like most things, it’s best to start at the beginning.   

Many people consider getting a consolidation loan from their bank, asking for help from friends or family or trying to negotiate a payment plan with each creditor independently- But did you know that you also have the right to consider a consumer proposal or bankruptcy? That’s where a Licensed Insolvency Trustee (LIT, formerly known as a bankruptcy trustee) comes in.   

The Impact of Overwhelming Debt 

Dealing with debt can have significant emotional and financial implications. The stress brought on from can affect your mental well-being and relationships as well as your physical health. It is essential to recognize that there are options available for achieving a fresh start and regaining control over finances. 

Considering All Your Options 

When faced with overwhelming debt, it is important to understand all of your debt relief options. These options include consolidation loans, seeking help from friends or family, negotiating payment plans with creditors, debt counselling and considering consumer proposals or bankruptcy. 

What is a Licensed Insolvency Trustee (LIT) and how can they help me? 

1. A Licensed Insolvency Trustee is the only professional that is authorized to govern consumer proposals and bankruptcies. They can reduce your debt owing to a fraction of the original amount.   

2. They go through rigorous, lengthy training in the options that are available to Canadians and their activities are regulated by the federal government, which also monitors their practices.  

3. A LIT will work with you and your creditors to build a consumer proposal (or bankruptcy if that is deemed to be the best option) that is fair for both parties.  

4. A LIT will also put a stop to ALL collections activity as soon as you enter into an agreement. That means no more harassing calls and no more letters! 

 That’s right.  

Imagine the relief of having those anxiety-inducing calls and letters coming to a complete halt.                                                                                                                  

5. The LIT works as part of a team whose goal is to support you throughout the entire process of managing your debt – from assessing your current situation and recommending the best course of action. 

The Benefits of Working with an LIT 

There are many benefits to working with a LIT including the immediate relief from collections activity, as an LIT can put an end to harassing phone calls and wage garnishments. LITs also work as part of a team, providing comprehensive support throughout the debt management process. It is important to note the differences between LITs and other debt services, such as debt consultants, as LITs offer specialized expertise in legally binding debt solutions which no one else is able to offer. 

A LIT deals with your creditors directly, in a legally binding way, immediately stopping those agonizing calls, letters, emails and even wage garnishees. 

Eligibility and Considerations 

Anyone facing overwhelming debt can contact an LIT to explore their options. LITs can evaluate individual debt situations and advise on the most suitable course of action.  Seeking the assistance of an LIT is a proactive approach to regaining financial stability. 

Consumer Proposals: A Fresh Start for Debt Management 

Consumer proposals are a powerful debt management solution. They involve negotiating legally binding arrangements with creditors, resulting in debt reduction and forgiveness. A LIT's role is to stop creditor communication and wage garnishments, providing individuals with a chance to rebuild their financial lives. 

Choosing the Right LIT 

When selecting a LIT, it is important to do your research. 

Finding a Licensed Insolvency Trustee (LIT) 

Any Canadian who finds themselves overwhelmed by debt or is struggling with significant financial difficulty should consider speaking to a LIT as one of their options.  

The options that are available to you will depend on your specific situation but it’s still a good idea to know what they are before making a final decision.  

The one thing you know for sure is if you do nothing, the situation will only worsen, so it’s best to get started sooner rather than later.  

The best bankruptcy trustees are an integral part of a team whose job is to get you that fresh start that you’ve wanted for so long. No judgment. And at Bromwich+Smith, there is no up-front cost, and you don’t have to come to the office to speak with one. You can do that right from the comfort of your own home! 

How do I find a LIT?  

• By contacting Bromwich+Smith  

• By searching online for “licensed insolvency trustee” or “office of the superintendent of bankruptcy Canada” via Google or any other search engine.  

Managing overwhelming debt requires research to understand available options. Finding a trusted LIT is crucial in regaining control over finances and achieving a fresh start. By contacting Bromwich+Smith individuals can begin the journey towards financial stability. It is never too late to seek assistance and regain control over overwhelming debt.  

Once you have determined that you need debt help, reach out to a Licensed Insolvency Trustee firm, like Bromwich+Smith for a free, no obligation and personalize consultation. You will get the facts, know your rights, and be able to make an informed decision to get out of debt and enjoy your retirement.  

At Bromwich+Smith, Debt Relief Specialists are available by phone at 1.855.884.9243 or you can request a call back via the contact us page.   

 

 
FAQ-related LIT: 
 
 
1. What does a LIT do?  

A LIT (Licensed Insolvency Trustee) is a professional authorized to oversee consumer proposals and bankruptcies. They help individuals by reducing their debt to a fraction of the original amount and working with them and their creditors to create fair agreements. LITs also put an end to collections activities and provide comprehensive support throughout the debt management process. 
 
2. How is a LIT different from a debt consultant?  

A LIT differs from a debt consultant in terms of specialized expertise and legally binding debt solutions. While debt consultants may provide advice and guidance, LITs have the authority to govern consumer proposals and bankruptcies, offering effective debt reduction and forgiveness options. 
 
3. Can anyone contact a LIT? 

Yes, anyone facing overwhelming debt can contact a LIT to explore their options. LITs evaluate individual debt situations and provide advice on the most suitable course of action. Seeking the assistance of a LIT is a proactive approach to regaining financial stability. 
 
4. What do I look for in a LIT? 

When you’re going through a financial crisis, it’s easy to feel defeated, hopeless, and that your self-worth is in question, so the insolvency professional you work with must provide nonjudgmental, timely, and responsive support immediately. 

All LITs are regulated and educated according to government requirements, so it’s really about who is going to help you rebuild your worth and help you plan for a better financial future. 

You may have many questions like: 

• Who is going to help you get to where you need to be? 
• Are they responsive? 
• Are they thinking about your entire journey, including what your life will look like five years from now? 
• What kind of reviews are past clients leaving on social media? 

When contacting any Debt Relief service, it is highly recommended that you ask if they are a LIT. By asking that question initially, you can weed through who is and who isn’t a Licensed Insolvency Trustee (formerly known as bankruptcy trustee), save yourself valuable time, money, and any other unnecessary fees they may charge. 

5. How do I find a licensed insolvency trustee?   

There are several ways to find a licensed insolvency trustee: 
 
Contact Bromwich+Smith, a reputable firm specializing in debt relief solutions. 
Search online for "licensed insolvency trustee" or "office of the superintendent of Bankruptcy Canada" using search engines like Google. 
Reach out to organizations that provide information and resources on managing debt for recommendations and referrals. 

A LIT deals with your creditors directly, in a legally binding way, immediately stopping those agonizing calls, letters, emails and even wage garnishees. 

6. Who does a LIT work for? 

The work of a licensed insolvency trustee is regulated by the federal government and their job is to find a fair and equitable solution for both you and your creditors; because of this, their fees are pre-defined by the government. That includes how much, when, and how they’re paid. 

Those fees come directly out of the settlement that has been arranged between you and your creditors, so you don’t have to pay them out of your pocket. 

 

Rick Hamilton, LIT, CIRP, CPA, CMA Rick is a Licensed Insolvency Trustee and professional accountant with over 25 years of experience assisting corporate and consumer debtors through their financial difficulties. Rick’s previous business experience includes tenure as a Controller and Senior Financial Manager, primarily in the real estate and agriculture industries.   His insolvency experience, professional background and business acumen have proven to be invaluable to secured lenders, business owners and consumer debtors in assessing critical issues and finding meaningful, creative, and timely solutions.

 

Related blog:

1- Five Things to Know about Bankruptcy and Insolvency in Canada

2-https://www.bromwichandsmith.com/blogs/how-find-right-licensed-insolven…