Trustee in Bankruptcy designation to change
A Trustee in bankruptcy is the only professional licensed by the Federal Government to perform services pursuant to Federal legislation known as the Bankruptcy and Insolvency Act (“BIA”). In April 2016 a new Directive expected to be issued by the Office of the Superintendent of Bankruptcy (“OSB”) will require all Trustees in Bankruptcy to use the professional designation LIT (Licensed Insolvency Trustee) in all advertising. This new designation is expected to more accurately reflect the services provided by the profession and will more clearly identify for Canadian individuals those who are licensed by the OSB to provide services under the BIA such as bankruptcies and proposals. It is proposed that the LIT designation will be required in all advertising directed at individuals looking for assistance and options for dealing with their debt. It will not be required in advertising Trustees in Bankruptcy which is directed at insolvent corporations or for those services unrelated to insolvency.
What is an LIT?
In order to be licensed by the OSB, an individual must complete an educational program and testing in order to qualify to be licensed as a Trustee in Bankruptcy. Only those licensed by the OSB as Trustees in Bankruptcy are able to administer the BIA. Only a licensed Trustee in Bankruptcy will be known by the designation LIT. The purpose of the new designation, LIT, is to provide clarity for individuals relating to those professionals who are licensed by the OSB to provide services under the BIA.
Why is it important to use an LIT?
A Trustee in Bankruptcy (LIT) provides services including bankruptcy, proposals and receiverships pursuant to the BIA. By choosing a Trustee in Bankruptcy (LIT), consumers can have confidence that the professional assisting them with solutions for dealing with their debt is qualified, licensed and regulated. A Trustee in Bankruptcy (LIT) is held to a high standard of professional conduct and code of ethics when providing BIA services and performing their duties.
Is a debt settlement specialist and an LIT the same thing?
A Trustee in Bankruptcy (LIT) is the only professional licensed by the Federal Government to perform services pursuant to Federal legislation known as the Bankruptcy and Insolvency Act (“BIA”). It is not the same thing as a “debt settlement specialist” who may provide debt solutions services not legislated by the BIA.
Will someone have to pay more if they use an LIT?
A Trustee in Bankruptcy (LIT) is paid under the BIA pursuant to the Bankruptcy and Insolvency General Rules. In some cases an individual may pay higher fees when working with other professionals who may not be regulated and are offering debt solution services outside of the BIA. It may be wise to seek advice and do research on all options available and associated costs before deciding on the solution best suited to your individual needs.
What’s the difference between an LIT and a licensed Trustee in Bankruptcy?
There is no difference. The term “Trustee in Bankruptcy” will be discontinued and will be replaced by “Licensed Insolvency Trustee” (LIT). There will be no change in the services and duties being performed by those professionals.