Managing debt with a Licensed Insolvency Trustee

^{By Bromwich+Smith Staff | 838 words | Reading Time: 4 minutes and 11 seconds | Last update: 2023/02/23}

Licensed Insolvency Trustees (LITs) truly are the experts when it comes to managing your debts. A Licensed Insolvency Trustee (LIT),  assists with budgeting, and financial literacy education. They negotiate and work with creditors and debtors, to offer a debt solution that does not require the repayment of “100% of the balance owed at the start of the plan.” An LIT is a federally regulated professionals who provide advice and services to  individuals and businesses with debt problems.

Why You Need A Licensed Insolvency Trustee?

Debt can leave you feeling incredible anxiety and unsure of where to turn. This is where a Licensed Insolvency Trustee not only finds a way for you to conquer your debt but they also become a trusted advisor. 

What is a Licensed Insolvency Trustee?

A Licensed Insolvency Trustee in the simplest form is a debt consultant. They are professionally trained and federally legislated to provide services and offer advice to any individual or business experiencing financial challenges.

How does a Licensed Insolvency Trustee Help Me?

A Licensed Insolvency Trustee can help with any debt-related issues, whether you are facing personal or business bankruptcy. In fact, if you are planning to officially file for bankruptcy, you will be required by law to consult a Licensed Insolvency Trustee to complete the process. 

Avoiding Bankruptcy with a Consumer Proposal

If you are trying to avoid bankruptcy, a Licensed Insolvency Trustee will help you find solutions and one of them is a consumer proposal. 

If you are not familiar with consumer proposals these are some of the advantages: 

• Settle your debt based on what you can afford, not what creditors are demanding.
• Stops all creditor actions, including collection calls and wage garnishees.
• Legally force creditors into a settlement, even if they don’t all agree.
• Stop interest charges immediately.
• Are paid through one monthly payment, with up to 5 years to pay.
• Unlike bankruptcy, a consumer proposal doesn’t involve your assets or other possessions.
• No additional fee payments from you, as we are paid by a government tariff.

Dealing with financial difficulties on any scale is very stressful and can sometimes lead to poor decision making. By reaching out and connecting with a LIT, you can ensure you are working with an expert to develop a plan to not only fix the situation but protect you from future debt-related issues. They can also assist you with settling your debts for less than what you owe. 

When you talk to a professional in regards to debt relief options, you may be introduced to your designated LIT in the initial stages, but don’t be alarmed if you do not meet with them until later in the process. Your LIT is required to complete the assessment as a part of the last stage of signing into the bankruptcy or consumer proposal  process.  They must ensure that you understand all options and that they you understand the impact and consequence of any decision made.

How does a Licensed Insolvency Trustee Get Paid?

Although you might believe there is a fee to work with a Licensed Insolvency Trustee, it is actually free of charge, according to the law. LITs are paid from the money that is recovered in the restructuring program that you choose. You aren’t required to pay them a separate fee. 

How do you become a Licensed Insolvency Trustee?

The area of insolvency can be quite complex and although the processes are governed by legislation, there are some situations where a Trustee may be required to interpret different legislation in order to make a determination on a course of action that is in the best interests of creditors.  This means that it can take years before an individual has the experience and confidence to act in that kind of position of authority and responsibility. 

In order to become a Licensed Insolvency Trustee (LIT), an individual must obtain the Chartered Insolvency and Restructuring Professional (CIRP) designation exclusively provided through the Canadian Association of Insolvency and Restructuring Professionals.  The educational program, including prerequisites and tracking of hours for this CIRP designation, is governed by CAIRP and a candidate may compete the designation within a minimum 2-3 period depending on their success at each stage of the learning, but may take longer.  Once the individual has obtained the CIRP designation from CAIRP, and have met those requirements, the candidate would be invited by the Office of the Superintendent of Bankruptcy (OSB), a federal government body, to sit before an Oral Board Examination.  Upon passing that oral examination, it is the OSB that would then grant the individual the License.

After earning their license, the learning for an LIT does not stop.  There is mandatory professional development on an ongoing basis.  As the industry changes, it is very important for an LIT to be aware of new and developing issues in the industry.

If you are overwhelmed and feeling alone, Bromwich+Smith has a number of debt relief strategies to help you regain control of your finances and get your life back on track. Reach out today for a free, confidential, no obligation consultation. Bromwich+Smith’s Debt Relief Specialists are available by phone at 1.855.884.9243, or request a call back at contact us page. We want to see you flourish!