What is a licensed insolvency trustee?

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A Licensed Insolvency Trustee (LIT) is your go-to financial expert in Canada when debt feels overwhelming. Trusted and regulated by the Office of the Superintendent of Bankruptcy, they mediate between you and creditors, handle paperwork, and manage asset distribution without extra costs . BUT… Trustees get paid by the lenders and creditors and don’t advocate for Canadians in debt. LITs can also double bill you or charge you extra. Beware! Reach out via phone, text, or live chat if you have any questions. We can help you find the best trustee.

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Licensed Insolvency Trustee Question

What is a licensed insolvency trustee? I’ve heard people talk about licensed insolvency trustees when discussing bankruptcy, but I’m not clear on their role or how they help.

From: Anonymous Question
Location: Toronto, Ontario (ON)
Category: debt management plan

Licensed Insolvency Trustee Answer

A Licensed Insolvency Trustee (LIT) in Canada is like your financial lifeguard when you’re drowning in debt. These pros are federally regulated and licensed by the Office of the Superintendent of Bankruptcy (OSB). So, you know they’re above board. They’re the friendly, neutral ground between you and your creditors, handling official paperwork, asset distribution, and keeping those pesky collection calls and wage garnishments at bay.

These trustees are your go-to for understanding your financial options, guiding you on what’s best for your debt relief, and ensuring everyone plays by the rules. Finding a reputable LIT is crucial because not every trustee gets a gold star in trustworthiness. Trustees get paid by the lenders and creditors and don’t advocate for Canadians in debt. LITs can also double bill you or charge you extra. Beware! If you’re feeling overwhelmed or need some tailored advice, don’t hesitate to reach out. Whether it’s through a call, text, or live chat, getting the right help can make all the difference. We can help you find the right trustee for you.

From: Insider Adam

Office of the Superintendent of Bankruptcy (OSB) Answer

A licensed insolvency trustee (LIT) is a professional authorized under Canadian law to administer bankruptcy and consumer proposals. Their primary roles include evaluating the financial situation of individuals seeking relief from debt, providing advice on solutions such as bankruptcy or consumer proposals, and managing the process of debt resolution. According to the Bankruptcy and Insolvency Act (RSC 1985, c 11), specifically in Part I, a trustee must be licensed by the Office of the Superintendent of Bankruptcy, ensuring they meet the required competency and ethical standards. They also represent the interests of creditors in the process, ensuring that all procedures comply with legal obligations as outlined in the relevant regulations, such as the Bankruptcy and Insolvency Regulations (C.R.C., c. 369). Furthermore, they also fulfill specific functions regarding the distribution of assets and reporting on the financial status of the debtor as mandated in the act and its regulations.

From: OSB Helper

Related Questions to Licensed Insolvency Trustee

Here are the top 5 most frequently asked questions related to “What is a licensed insolvency trustee?” based on the provided sources and current trends:

1. What is a Licensed Insolvency Trustee?

A Licensed Insolvency Trustee (LIT) is a federally regulated professional authorized to administer insolvency proceedings, including consumer proposals and bankruptcies[1][3][5].

2. Who can be a Licensed Insolvency Trustee?

Only professionals licensed by the Office of the Superintendent of Bankruptcy can be Licensed Insolvency Trustees[1][3][5].

3. What are the roles and responsibilities of a Licensed Insolvency Trustee?

A Licensed Insolvency Trustee assesses assets and liabilities, develops plans for paying debts, administers payments to creditors, maintains records, and provides oversight over insolvency proceedings[1][3][5].

4. Is a Licensed Insolvency Trustee impartial?

Yes, a Licensed Insolvency Trustee is required to be impartial and maintain strict confidentiality[1][3].

5. What is the difference between a Licensed Insolvency Trustee and a debt consultant?

A Licensed Insolvency Trustee is federally regulated and authorized to file consumer proposals and bankruptcies, whereas a debt consultant is not regulated and cannot initiate insolvency proceedings[2][3][5].

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

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