What Does an LIT do?
In April 2016, Trustees in Bankruptcy will be undergoing a name change – they’ll be known as Licensed Insolvency Trustees (LITs). Beyond the name change, though, what will an LIT do?
The answer is quite simple: everything that a Trustee in Bankruptcy does now. The role of the trustee isn’t changing, just their name.
An LIT is there to help you get through your debt situation – it’s a complex problem with multiple solutions. An LIT is licensed and regulated by the government to make sure that your rights and interests as a debtor, or a person owing money, are respected.
Can an LIT help me with a consumer proposal?
Yes. Just as a Trustee in Bankruptcy is licensed to negotiate a consumer proposal, or agreement with your creditors to eliminate the interest on your debt, reduce the amount owing, and/or extend the timeframe you have to repay your debts, so will a Licensed Insolvency Trustee. And as it is now, where a Trustee in Bankruptcy is the only licensed official legally allowed to file consumer proposals on behalf of debtors, it will be in April. The only difference between then and now will be what we call trustees.
The word ‘bankruptcy’ is gone from the name. Does that mean LIT won’t be able to help me with a bankruptcy?
Not at all. The word bankruptcy was actually seen as rather limiting in the name – it projects a negative connotation, or meaning, on the process. When you hear the word ‘bankruptcy,’ you don’t think about the clean slate you are getting or the relief you’re getting from your crushing money problems. All you can think about are the feelings of shame, guilt, and failure that ‘bankruptcy’ is linked to. With the new name, Licensed Insolvency Trustee, the focus is on the problem (insolvency) and solving it.
Right now you can contact a Trustee in Bankruptcy and they will help you navigate this tricky time, making sure your rights are protected, that your creditors are not harassing you, and that you understand all of the laws regulating bankruptcy. In April 2016, it will be the same – Licensed Insolvency Trustees will take you step by step through the process, ensuring you get the best solution for your debt situation. The only difference? What you’ll call your trustee.