5 Ways a Licensed Insolvency Trustee Can Help

When most people hear the words “Licensed Insolvency Trustee,” they automatically think of a person who handles bankruptcies. While this is true, an LIT actually does much more than just bankruptcies. They can provide help and a number of services to anyone struggling with debt.

To give you a better idea, here are five ways a Licensed Insolvency Trustee can help you find a way out of your financial trouble:

1. Offer free, unbiased advice.

Before you can file for bankruptcy, you must first meet with an LIT. This meeting is free. During your consultation, the trustee will go over your finances with you. He or she will look at the amount of debt you have, the nature of that debt, and who your creditors are. They will also look at your family income needs as well as your assets.

The Trustee will need to ask you questions about any transactions you may have made that would become reviewable in an insolvency situation. It is important that you give full information to the trustee if you want advice based on your actual situation. You need to know clearly what all your various options are, and those options are affected by what you owe, to whom you owe it, as well as what you own and what actions you have taken to date.

Once they have reviewed all those things, the trustee can make recommendations on how to best handle your debt. They will be able to give you the pros and cons of any options that could be viable in your situation.

All of this can be done in that free initial consultation. If you seek and receive advice early enough, you may find that the Trustee can help you identify options that do not involve bankruptcy. In that case, they can give you advice on how to deal with the debt on your own.

If your situation is more critical, you may need to use the legislative services that can only be provided through an LIT. Those are a Consumer Proposal or a Bankruptcy. Again, if those are your only viable options, they will be explained to you in detail so that you can decide which works best for you. They each have distinct benefits or disadvantages, depending on your personal situation.

2. Answer your questions.

When you need debt help, either because you owe money, or because you are owed money, you probably have a lot of questions. A Licensed Insolvency Trustee is the best source for answers to your questions. A trustee’s education, training, and experience, as well as an ongoing professional education program, makes them experts in their field. This makes them highly knowledgeable and qualified to answer the questions of both debtors and creditors.

3. Protect yourself from your creditors.

There are only two proceedings in Canada that legally protect you from your creditors — bankruptcy and a Consumer Proposal. Both can only be prepared by Licensed Insolvency Trustees. (Credit counsellors do not have the ability to stop collection practices or to ensure that all your creditors will comply with any agreements you make through them.)

When you file bankruptcy or a Consumer Proposal, your trustee will inform your creditors. By law, your unsecured creditors are no longer allowed to attempt to collect money from you. That means no more phone calls, no letters, or any other collection attempts against you. If there is a garnishment of your wages or bank account either threatened or already in place, it will be stopped by a process called a Stay of Proceedings.

4. Negotiate settlements on your behalf.

If you decide to file a Consumer Proposal, your trustee will work with you to determine how much you can realistically offer your creditors and over what period of time. Because the trustee has extensive experience working with various creditors, they should be able to give you a good idea of what some creditors will accept and what they will not. Once you have worked out what you wish to offer, the trustee then contacts your creditors. They have the opportunity to vote for or against a proposal (unlike a bankruptcy where creditors have no choice). The trustee will work with your creditors to help them agree to an amount you can afford to pay each month. This is not something you can (or would probably even want) to do on your own. More importantly, the Stay of

Proceedings go in place as soon as you make the proposal, so, through a Licensed Insolvency Trustee, you have protection from the creditors during the entire process.

5. Provide credit counseling.

In addition to preparing bankruptcies and Consumer Proposals, trustees also provide credit or financial counseling. If you file bankruptcy, two counseling sessions are required. During your counseling sessions, you will learn how to manage and budget your money and how to use credit wisely. Credit counseling is designed to help you avoid serious financial problems again in the future.

If you are in debt and looking for a way out, a Licensed Insolvency Trustee in Canada can provide the widest range of options, and the most expert and experienced advice available.

Leigh C. Taylor, LIT

Leigh has been working in the insolvency field since 1975. He is a graduate of the University of Manitoba. Leigh began his career as an Official Receiver with the Office of the Superintendent of Bankruptcy. He is a Certified Professional Accountant, and he attained his license as a Licensed Insolven Read More Leigh has been working in the insolvency field since 1975. He is a graduate of the University of Manitoba. Leigh began his career as an Official Receiver with the Office of the Superintendent of Bankruptcy. He is a Certified Professional Accountant, and he attained his license as a Licensed Insolvency Trustee in 1980.Leigh has been a member of the Canadian Association of Insolvency and Restructuring Professionals (CAIRP) since its inception. He is a Past President of several organizations, including the Manitoba Association of Insolvency and Restructuring Professionals (MAIRP), the Armstrong Point’s Association, and the Manitoba Opera. In addition, he has served for numerous years in leadership roles in Winnipeg churches. Close