In April 2016, Trustees in Bankruptcy will be getting a new name, but not a new job. The Office of the Superintendent of Bankruptcy (OSB) announced in June that trustees will be referred to as Licensed Insolvency Trustees (LITs), and with the change there will be greater clarity around exactly what they do.
Trustees in Bankruptcy have long been misunderstood as one-trick ponies – specialists in bankruptcy. While that is true (they are the only licensed individuals who can help consumers and businesses file for bankruptcy), they do offer other services, like debt counseling, and are the only professionals who can file consumer proposals with creditors. They are also people who can protect you from collection agencies and wage garnishment. And while they’ve always had the mandate and expertise to do all of these things, when you hear the name ‘Trustee in Bankruptcy,’ you only think of one thing: bankruptcy.
While the name will help trustees be known for more than just bankruptcy, it will also help people distinguish them from ‘insolvency experts’ and ‘insolvency specialists’ who claim to have the legal ability to help consumers with their debt, but actually don’t.
So, who are these ‘insolvency consultants?’
You’ve probably heard their ads on the radio or television or have even seen banners advertising their ‘services’ online. They promise to help you reduce your debt and get you into ‘new government programs’ that will help you stop collectors’ calls. It all seems well and good until you speak to them on the phone and discover that you have to pay high fees upfront for them to help you, and even then the services you are getting are a crapshoot. They are neither trained nor licensed to deal with the courts on your behalf. They may or not follow through with their promises once you have paid them. And they may or may not be successful with your creditors in solving your debt problems, stopping wage garnishments, or putting an end to harassing collections’ calls.
With a Licensed Insolvency Trustee the name tells you exactly what you are working with.
You are working with someone who is licensed by the Government of Canada to work on your behalf with your creditors and the court to resolve your debt issues – LITs are the only professionals who have this distinction.
You are working with an actual expert in insolvency, someone who has a background in finance, who has an understanding of debt and the effect debt has on all aspects of your life, and who has gone through rigorous training and is accredited to assist you with your debt. You are working with someone who will help you restructure your life after debt, providing you with the tools and help you need to take those first steps into your fresh start.
You are working with a trustee, someone who has been given the power to help consumers deal with their debt by law, and therefore they are bound by law to work in an upstanding and professional manner.
The new name doesn’t change what they do or who they are, but it will hopefully help more people understand just how an LIT can help with their debt, without the fear of a scam.