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Most people don’t think that there may come a moment when they need help in dealing with their financial issues. When problems start piling up and debt goes over a certain threshold, people lose control but keep telling themselves that everything is fine. What used to be a manageable debt becomes something that’s too difficult for one person to handle.
The only professionals who are educated, experienced and authorised to help you are Licensed Insolvency Trustees (LITs). Therefore, if you’re thinking about filing a consumer proposal or bankruptcy in Toronto, you need an insolvency trustee near you to administer and manage the process.
Keep reading to learn more about Licensed Insolvency Trustees, their functions, education, and ways in which they can help you.
What Is an Insolvency Trustee?
A Licensed Insolvency Trustee is an expert in all debt-related matters, consumer proposals, bankruptcy, debt restructuring, debt consolidation, and finally, debt resolution. They used to be called Licensed Bankruptcy Trustees, which led people to believe that the only services they provide are bankruptcy-related. To avoid confusion and help people understand that they can help explore all other debt-relief options, the name was changed to Licensed Insolvency Trustee.
The consumer proposal and personal bankruptcy processes in Canada are regulated by the OSB (Office of Superintendent of Bankruptcy), which licenses and regulates Licensed Insolvency Trustees. Before becoming licensed to practice, every LIT must complete a multi-year experience and educational program.
Studies and Degrees Needed To Become an Insolvency Trustee
Becoming a Licensed Insolvency Trustee is notoriously difficult because it requires years of education and training. Typically, these debt-relief professionals have a university degree (or at least five years of experience in the bankruptcy field) and a strong background in accounting.
They are required to complete written and oral exams, a bankruptcy course, a three-year law course, and be investigated by the Royal Canadian Mounted Police. The pass rate for the written exam is about 50%, which tells you how challenging it is. For those who pass the exam, it is mandatory to partake in ongoing education.
After being evaluated for their reputation, character, professionalism, skills, and abilities, the LIT candidate must complete two programs:
- The Chartered Insolvency and Restructuring Professional Qualification Program (CIRP)
- The Canadian Association of Insolvency and Restructuring Professionals (CAIRP)
The eligibility criteria and extensive training are important to ensure that every Licensed Insolvency Trustee is a professional in debt insolvency, and that they will find the most appropriate solution for each of their clients.
What Does an Insolvency Trustee Do for You?
Talking to an Insolvency Trustee can help you save a lot of time and money because they are trained to provide the right debt solution for your unique situation. They can offer various types of debt relief and handle all negotiations with your creditors. In Canada, Licensed Insolvency Trustees are licensed to manage:
- Consumer proposals (the most popular choice for debt relief in Ontario and other Canadian provinces)
- Confidential consultations
- Credit counselling
- Debt consolidation
- Debt settlement
LITs are legally responsible for sharing all viable debt relief solutions with you, making sure that you understand all the facts in order to make the most informed decision about your financial future. This is possibly the most important benefit of talking to a Licensed Insolvency Trustee in Toronto.
To put it simply, a LIT is a sort of mediator that helps you negotiate debt settlements with those you owe money to (creditors). Whether you opt for debt forgiveness or debt consolidation, the offers are created depending on various factors, such as:
- Your income
- The amount of debt you owe
- What kind of creditors you owe money to
- What challenges you are dealing with
- Any other relevant information prescribed by the BIA (Bankruptcy and Insolvency Act)
Trustees are officers of the court, and it’s their responsibility to make sure all parties get fair treatment in the process. In other words, they’ll ensure that the amount you pay back is enough for your creditors and that it’s affordable for you (while ensuring the arrangement and process complies with Canadian insolvency law).
Top Considerations When Looking for an Insolvency Trustee Near You
There are different types of debt relief plans available for you. However, if your consultant is unlicensed, they aren’t able to resolve your debt or offer debt forgiveness and have no legal power to provide creditor protection. If you decide to sit down and talk with a debt consultant, they will eventually refer you to a LIT anyway, but also charge you a fee.
When looking for an Insolvency Trustee near you, you need to get answers to a few essential questions, such as:
- Who is going to help me resolve my debt and get me where I want to be?
- Is my LIT responsive?
- Is my LIT thinking about my entire debt relief process, including helping rebuild my life during the next five years?
- What kind of testimonials and reviews did their past clients leave online?
When reaching out to a debt relief expert, ask them if they are a Licensed Insolvency Trustee. This question should be asked right away so you can weed through who is and who isn’t a LIT.
Areas of Insolvency They Specialise In
Typically, a Licensed Insolvency Trustee is an accountant by trade who specialises in debt-related issues. They have years of experience working in the bankruptcy field and step in to work with the Canadian Superintendent of Bankruptcy.
Coming equipped with bankruptcy law expertise is a must for LITs, and most of them specialise either in litigation or corporate work. Some LITs decide to specialise in a specific niche, such as environmental law, tax law, financing and acquisitions, etc.
Customer Reviews and Success Stories
Going to a trustee who was referred by a for-profit debt relief company is a risky way of finding a Licensed Insolvency Trustee. That is especially true if the debt relief company always refers only to one trustee.
As the Office of the Superintendent of Bankruptcy (OSB) warns, some for-profit debt relief companies have partnered with certain trustees to promote setting up bankruptcies and consumer proposals in ways that can expose you to needless expense and unnecessary risk.
In order to get a clearer picture of a Licensed Insolvency Trustee or debt relief company that you plan to contact, be sure to browse through the Internet for online reviews and client testimonials. Pay attention to both the positive and negative reviews and ask your local Toronto non-profit credit counselling company which LITs they would recommend.
Costs of Hiring an Insolvency Trustee
Tou can find all the rules that determine how LIT fees are calculated in most bankruptcy and consumer proposal cases on the Canadian Justice .gov site . We will now present you with basic information of the approximate costs and fees (as you can see on a Statement of Receipts and Disbursements.
If you’re filing for personal bankruptcy, it will cost you a total of $1,800 which you must pay over the course of 9 months. Filing a consumer proposal costs $1,500 (plus 20% for creditor distributions and other applicable taxes).
What is paid to your LIT:
- $1,265 Licensed Insolvency Trustee’s Allowable Fee
- $170 Counselling Session Costs
- $100 Administrative Allowance
Total paid to a LIT – $1,535
Other fees paid:
- $77 Government GST Payable
- $113 Levy Paid to OSB
- $75 Federal Government Filing Fee Paid
Total – $1,800
What Should You Look For When Searching for an Insolvency Trustee Near You?
When going through a difficult financial crisis, it is easy to bring your self-worth into question and feel hopeless and defeated. In those moments, you need professional help and guidance. It might be that you need an expert to help you create a strategy and show you how to manage your finances better. At other times, things can be more complex and require a solid long-term debt resolution plan.
Remolino & Associates offers insolvency services as well as responsive, timely, and non-judgmental support immediately. We will make everything clear and easy to understand, and there will be no point in the process where you will feel confused, worried, or out of the loop.
If you are feeling overwhelmed and like the walls around you are closing in, take the first step and call us. We will reassure you that things are going to change!
Book A Free Virtual Consultation
Remolino & Associates are experienced Licensed Insolvency Trustees with extensive financial knowledge.
Book a free consultation with Remolino & Associates at any time and we will answer all your debt-related questions. Our team is there to help you get peace of mind knowing that there is a solution for you out there, as well as that you’re not wasting your money or time. You can also reach us by calling (416) 792-5599 if you want to schedule an appointment or have questions.