What is a LIT and What Can They Do?
By Rick Hamilton| Reading Time: 6 min |1,208Words
More and more in this time of uncertainty, we hear of Canadians struggling with overwhelming debt. Many of us have lost our jobs, lost our businesses or striving to keep it all together.
With so many different bankruptcy 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.
If you feel you are drowning in a sea of debt and you just need someone to throw you a life raft, know it is within your reach.
Dealing with debt indeed is one of the most emotionally draining and challenging times in a person’s life; but did you know that as Canadians, we have agreed that when it comes to debt, everyone is entitled to a fresh start?
If you find yourself dealing with insurmountable debt, it’s important to consider all your options.
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.
So, what is a Licensed Insolvency Trustee (LIT) anyway?
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!
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.
How is a LIT different from another service, like a debt consultant?
As mentioned previously, there is a wide range of services that are available – from financial planners and debt consultants to short-term loans and consolidation services. However, a Licensed Insolvency Trustee/bankruptcy trustee has something that the others do not. They are the only ones that can arrange a consumer proposal or bankruptcy directly.
While having a variety of services to choose from, Canadians need to go over all their options before deciding on a strategy. If you speak with a debt consultant, they will charge you a fee and then quite possibly refer you to a LIT anyway.
Can anyone contact a 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.
Another great solution is to participate in a consumer proposal which will usually reduce your debt to a fraction of the original amount that was owing, with the rest being “forgiven”, as in – it goes away.
I know! It sounds unbelievable but it’s true.
A LIT deals with your creditors directly, in a legally binding way, immediately stopping those agonizing calls, letters, emails and even wage garnishees.
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!
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.
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.
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.
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.
There is no need to travel to a local office. Bromwich+Smith, is now offering video appointments, with all services available from the comfort of your home.
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.