What is an insolvency trustee?

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In Canada, a Licensed Insolvency Trustee (LIT) acts like a financial acountant. They explain your finances, explore debt relief options like consumer proposals or bankruptcy, and ensure legal compliance. They handle paperwork and asset distribution per the Bankruptcy and Insolvency Act. They get paid by the creditors and are not advocates for Canadians in debt. Not all trustees can be trusted. Reach out via phone, text, or live chat if you have any questions.

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Insolvency Trustee Question

What is an insolvency trustee? I’ve heard of insolvency trustees but don’t fully understand their role or how they help people manage debt.

From: Anonymous Question
Location: Ottawa, Ontario (ON)
Category: personal bankruptcy

Insolvency Trustee Answer

In Canada, a Licensed Insolvency Trustee (LIT) is like your financial navigator when you’re facing stormy seas. These professionals help you make sense of your money matters, breaking down what you own, what you owe, your earnings, and where it all goes. They’re your go-to guides for finding debt relief options, whether it’s navigating the personal bankruptcy route or exploring consumer proposals. They make sure you’re following the Bankruptcy and Insolvency Act (BIA) to the letter. Think of them as the referees who keep everything fair during insolvency proceedings, filing any necessary paperwork, and making sure any assets are divvied up to creditors the right way—always sticking to the rulebook and doing so ethically.

From: Insider Scott

Office of the Superintendent of Bankruptcy (OSB) Answer

An insolvency trustee is a licensed professional who assists individuals and businesses in managing their debt and navigating insolvency processes, such as personal bankruptcy or consumer proposals. Their role includes providing guidance on financial matters, preparing and filing necessary documents, and overseeing the administration of bankruptcy estates. Under the Bankruptcy and Insolvency Act (RSC 1985, c. B-3), specifically in section 2, an insolvency trustee is defined as a person who is licensed to act in this capacity and is responsible for representing the interests of creditors while also aiding debtors in finding viable solutions to their financial difficulties.

From: OSB Helper

Related Questions to What An Insolvency Trustee Is

Here are the top 5 most frequently asked questions related to “What is an insolvency trustee?” based on common queries and trends in the context of Canadian insolvency law:

1. What is the role of a Licensed Insolvency Trustee?

A Licensed Insolvency Trustee administers proposals and bankruptcies, manages assets held in trust, and ensures the rights of both debtors and creditors are respected.

2. How does a Licensed Insolvency Trustee help with bankruptcy?

A Licensed Insolvency Trustee helps by handling the bankruptcy process, notifying creditors, managing assets, and distributing funds to creditors, while also providing financial counseling and ensuring compliance with the Bankruptcy and Insolvency Act.

3. What are the duties and responsibilities of a bankruptcy trustee?

The duties include evaluating the debtor’s situation, notifying creditors, managing and distributing assets, arranging creditor meetings, and ensuring the debtor attends mandatory credit counseling sessions.

4. How do I find a Licensed Insolvency Trustee?

You can find a Licensed Insolvency Trustee through the Office of the Superintendent of Bankruptcy Canada, or by contacting a debt services company that employs licensed trustees.

5. Do I need to pay a fee to consult with a Licensed Insolvency Trustee?

No, Licensed Insolvency Trustees usually do not charge a fee for the preliminary consultation, although there are federally regulated fees for their services once you proceed with a proposal or bankruptcy.

If you have a question about debt see our debt questions or ask your own debt related question.

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