Why you should consult a Licensed Insolvency Trustee

Why you should consult a Licensed Insolvency Trustee

LITs are the only professionals able to administer the options legislated by the Bankruptcy and Insolvency Act which include Bankruptcy and Consumer Proposals.

A Licensed Insolvency Trustee (LIT) is licensed by the Office of the Superintendent of Bankruptcy (OSB), an agency of the Government of Canada. The OSB oversees all insolvency filings in Canada, regulates and licenses the insolvency profession and ensures compliance with the process, amongst other duties.

When individuals find themselves facing financial difficulties, they are often afraid to seek out the advice of a LIT. One often hears inaccurate and misleading statements that LITs “only represent the creditors” or that the LIT “will pressure me to file for bankruptcy”.

These are common misconceptions that are often promoted by debt relief agents or private debt consultants who have flooded the market in recent years. Most are unlicensed, unregulated and charge a substantial fee only to refer you to a LIT to deal with your debt as they are legally unable to administer the process.

Out of Debt, BC


Misleading Statement #1: “LITs only represent the creditors”

Private debt consultants want you to believe that a LIT is working only for the creditors and that you therefore need protection from the LIT or that you need someone representing you in the process. This is absolutely not the case. There are rare occasions when legal representation is required because of a specific transaction or asset sale. However, most individuals who seek out help from a LIT are honest people who have fallen on hard times and do not need legal advice to get through the process. A LIT has a duty to all stakeholders in the process including the debtor, the creditors, the OSB and the Court.

Debt consultants are not lawyers and therefore do not have solicitor-client privilege, they cannot give legal advice, and can be called upon to testify against you should you commit an act (even under their direction) that might be considered an offence.

Misleading Statement #2: “LITs will pressure me into filing for bankruptcy”

When meeting a LIT for the first time, you can expect a review of your financial situation called an “assessment”. This involves a discussion about your personal situation, your income, who you owe money to, and whether you have any assets. Next, the LIT will explain the legislated options that include bankruptcy and consumer proposal, as well as non-legislated options, including a consolidation loan or help with budgeting and financial management. We do not pressure you into filing bankruptcy; we provide you with the information so that you can make an informed decision and choose the option that best works for your specific set of circumstances.

Out of Debt, D. Thode and Associates Inc

Licensed Insolvency Trustees

If you are looking for information on how to deal with your debt, don’t hesitate to contact D. Thode & Associates Inc. for a free consultation. Our Licensed Insolvency Trustees are ready to help you build a plan that works for you and your creditors.

Office Locations & Service Areas

BC Interior - Kelowna, Kamloops, Penticton

Lower Mainland - Vancouver, Burnaby, Surrey, Chilliwack