A Licensed Insolvency Trustee (LIT) is a federally licensed and regulated professional that provides debt help in Canada. They are able to serve individuals and families, as well as businesses of all sizes.
Most have at least one additional professional designation, such as CPA (Certified Public Accountant) or CA (Chartered Accountant) certification. Alternatively, they may have a complimentary undergraduate degree, such as a BBM (Bachelor of Business Management).
What do trustees do?
Regardless of their background, all trustees are experts in all types of debts. This enables them to provide unique debt solutions that are tailored to each person they meet. They are also the only professionals who are legally permitted to provide consumer proposal and bankruptcy services in Canada.
In the simplest terms, Licensed Insolvency Trustees act as mediators that help you negotiate debt settlements with your creditors (those you owe money to). Whether you opt for debt consolidation or debt forgiveness, the offers are created based on a number of factors.
Such considerations include: the amount of debt you owe, how much income you have, what assets you own, what challenges you’re dealing with, which kinds of creditors you owe money to, and any other lawfully relevant information prescribed by the Bankruptcy and Insolvency Act (BIA).
As officers of the court, trustees are required to make sure all parties are treated fairly in the process. In other words, a trustee makes sure the amount you pay back is affordable for you. They also make sure the amount you pay back is enough to satisfy your creditors. All the while ensuring the process and arrangement complies with laws set out by the government.
Can a trustee reduce the amount of money I owe?
Yes. In some cases, they can eliminate your debt entirely. At minimum, the process of negotiating can usually relieve you of some (or all) of the interest being charged on the money you borrowed. Since interest charges can be quite high and pile up over time, this is a significant savings. Regardless of what the final dollar amount ends up being, your repayment plan will be one that is fair and works for you based on your individual situation.
Can a trustee stop collection agencies from harassing me?
Yes. Being harassed by creditors and collection agencies who call you day and night (sometimes even at work) is a common experience of people struggling with debt in Canada. LITs have the power to stop these calls as soon as you start working with them.
Can trustees stop creditors from garnishing wages from my pay cheque?
Yes. It is difficult to manage your life (let alone debt payments) when creditors are taking your hard-earned income directly from your employer, before it reaches your bank account. When you work with LITs, wage garnishments are stopped immediately.
Can a trustee help me keep my house if I need to file for bankruptcy?
Yes, in most cases. The common belief that people must give up their homes when filing for bankruptcy is just a myth. That is because, in Canada, we have ‘insolvency exemptions’.
This means you have the possibility of keeping certain assets like household goods, a vehicle worth up to a certain dollar value, and RRSPs (provincial restrictions apply) when filing for bankruptcy. No one wants to see families put out onto the street during times of financial hardship. Though selling property is an effective way to pay down debt, a LIT will do everything they can to help you keep your home.
How are LITs different from credit counsellors and bankruptcy lawyers?
Though Canadian lawyers are able to offer legal advice and represent a business or creditor in court, they are not permitted to administer formal insolvency proceedings like their American counterparts south of the border.
This is because bankruptcy lawyers are very expensive to work with and they bill by the hour. Individuals and corporations dealing with debt problems can’t pay lawyers to defend their rights and negotiate fair settlements, though. So, the BIA sets out controlled and affordable fees that LITs can charge to provide this service to all Canadian citizens and companies in need.
Credit counsellors can neither represent you in court nor administer formal insolvency proceedings. That is why credit counsellors refer their clients to a Licensed Insolvency Trustee for bankruptcy and consumer proposal services, when informal debt management strategies aren’t enough (or fast enough) to help them through tough financial situations.
Credit counselling is still a valuable resource for learning how to budget your money and improve your credit score once your negotiations are settled. This is why a minimum of two counselling sessions is required of anyone who files for bankruptcy in Canada.
In short, bankruptcy lawyers can defend you or your business in court and credit counsellors can help you learn strategies for staying out of debt. But, LITs are the only professionals trusted by the government to help Canadians and their creditors settle debts fairly – and without having to go to court.
What training is required for a LIT to get their license?
Unlike credit counsellors, trustees undergo rigorous study and training to understand insolvency law, and must meet government standards in order to be licensed. Many also have accounting licenses or other professional and academic backgrounds in finance, business, or social work which increase the quality of their services.
In order to become licensed, there is a three-year mandatory course, followed by a series of exams and work experience that takes place. After successful completion of the course, the aspiring trustee appears before a board consisting of a member of the Office of the Superintendent of Bankruptcy (OSB), an insolvency lawyer, and an already licensed trustee. Only a fraction of those who complete training and take the exams pass and are deemed qualified to serve.
Once they are licensed, it is their legal responsibility to act impartially and create reasonable offers for debt repayment that will ease debt burdens on consumers and satisfy creditors (win-win).
What kinds of debt can LITs help with?
All kinds of debt.
- credit card debt
- tax debt
- student loan debt
- personal debt
- and business debt
What happens in a meeting with a Licensed Insolvency Trustee?
When you meet with a LIT, they look at all of the types of debt you have, review all of the options available to you, and assess the best way for you to manage them. This is usually done with one of the two debt relief plans available to individuals under the BIA: consumer proposals and bankruptcies.
A consumer proposal offers you the ability to pay back a portion of your debt without interest and/or over a longer period of time. This type of debt help freezes interest and penalties, while allowing you to keep assets – making it a viable solution for high-interest credit card debt.
In contrast, a bankruptcy works much faster. In as little as 9 months, you can have a financial fresh start. This plan offers relief from wage garnishments and nearly all types of debt. Plus, your trustee will help you manage your obligations over that 9-month period in order to ensure you complete the process successfully.
Whether it’s a consumer proposal or a bankruptcy, your trustee’s team will be by your side every step of the way. They will also make sure you understand your legal obligations and the consequences of not meeting those obligations, so you’re not met with any unpleasant surprises.
I’m a small business owner and I’m overwhelmed by debt. What can a trustee do for me?
Licensed Insolvency Trustees are well-versed in different corporate models and can help businesses of all sizes through restructuring and debt settlement processes. In consultation with you and your partners, your trustee will devise the best debt settlement strategy for your business needs. They can also help you do the math to decide whether it’s better to continue running your business with a new strategy or simply close it down.
Where can I get debt help in Canada?
Finding the right debt help in Canada can be confusing. Trustees make it simple.
Or simply book a FREE phone consultation online to speak with our experts from the comfort of your home and learn what debt management options may be available to you.
Why should I work with Spergel LIT?
Spergel has been trusted by over 100,000 people to provide the best debt help in Canada for over 30 years. We know that everyone experiences doubts about their financial future at some point in their lives and that there are many reasons for why good people get stuck, financially. Ours is a judgement-free environment.
Gillian Goldblatt, a Licensed Insolvency Trustee here at Spergel, has been helping Canadians with debt for many years. One of her favourite success stories is of a young mother who was struggling with student loan debt and constant calls from collection agencies. With Gillian’s help, that young mother become financially free to pursue her dream of running a business – and in a relatively short amount of time.
“Bankruptcy allowed her to discharge her debts, and as a result, her stress level was significantly reduced which, in turn, improved her overall health. I was also able to provide significant budgeting assistance to both her and her spouse, to manage their limited income. This had not been a possibility before.”
Maybe you have a lot of credit card debt. Maybe you’ve recently received notice of a wage garnishment and aren’t sure what this means or how much money will be left at the end of the month. Perhaps you’ve turned to friends for advice on what to do when debts get out of hand. Maybe you’re just not sure what the best pathway forward is for your situation.
While Spergel Licensed Insolvency Trustees can provide debt relief quickly in the form of a consumer proposal or bankruptcy, what their service really offers is peace of mind.
By working with our team, you can:
- Learn your legal obligations and how to meet them
- Find comfort in knowing the process is transparent and fair
- Take control of your finances with a win-win debt repayment plan
- Empower your future with credit counselling sessions that help you learn how to budget, rebuild your credit, and understand the credit system we all live in
Connect with us online to get started today.
You Owe it to Yourself.