What are the Duties of a Licensed Insolvency Trustee and Why do You Need One?

What are the Duties of a Licensed Insolvency Trustee and Why do You Need One?
  • Opening Intro -

    A licensed insolvency trustee is a trained professional who oversees the filing bankruptcies and consumer proposals.

    These trustees are usually regulated by the Office of the Superintendent of Bankruptcy, which is a subsidiary branch of the federal government.

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Both bankruptcy and a consumer proposal are legally binding actions and must therefore be filed exclusively by a licensed insolvency trustee.

They are not quite technically hired by the federal government but they have a duty to adhere to all the laws and regulations outlined in the Bankruptcy and Insolvency Act of the states in which they operate.

They provide a wide scope of debt management solutions, working closely with those in need of debt relief by assessing their financial standings or situations and helping them come up with informed decisions. Their roles are as outlined below:

1. Consultation

This is the very first meeting you will have with the licensed insolvency trustee. You are not charged on this meeting, it is totally free. It is during this meeting that your trustee assesses your financial situation then tries to access the issues you have with debt repayment.

They don’t just help with bankruptcy issues, they give you all the options then let you analyse and select which debt management solution would work for you. The plan you select may include some type of insolvency proceeding or not, but they don’t get to decide for you. You make the choices you want for the payment of your debts and their only job is to help you throughout the process.

2. Getting your Credentials

A licensed insolvency trustee collects information from you and prepares the required documents that will be filed with the government. This then becomes the official onset of your insolvency proceeding, whether it’s a personal bankruptcy or consumer proposal.

3. Communication with your Creditors

Your creditors will be notified and the LIT will accept claims from both parties and review them, then administer the insolvency process. For consumer proposals, votes are recorded to determine whether or not the proposal has been accepted by the creditors.

The licensed insolvency trustee has the authority to sell your assets and use the money they recover from the sale to help you settle your debts. Alternatively, they can also help you make a proposal to the creditors in order to avoid bankruptcy.

4. Follow Up

The licensed insolvency trustee will make sure that you have completed all the essential duties for insolvency. Based on the type of insolvency proceeding you select, they will apply for your completion certificate or discharge in which case you will ultimately be relieved of your debts.

In case you will need the protection of independent legal advice, it also the job of the trustee to refer you to an insolvency lawyer. They can also offer debt counseling and a solution that won’t cost you anything but help you avoid bankruptcy.

When dealing with licensed insolvency trustees, you are guaranteed of protection in a number of ways. This is primarily because the federal government regulates the trustees, who are subject to a stringent code of ethics. There is also a mechanism that has been put in place to mediate any dispute that may ensue during the procedure.

However, your aim should be to avoid bankruptcy, which means you will have to go with a consumer proposal in order to maintain a better relationship with your creditors. Besides, even with bankruptcy declaration you still get to settle your debt, only it allows you a wider span to completely repay it.

When choosing licensed insolvency trustees, you should be wary as they are the only professionals allowed to legally file a bankruptcy or consumer proposal. This will ensure that you are totally guarded from your creditors since a trustee is considered an Officer of the Court and both bankruptcy and a consumer proposal are legal proceedings.

There are no alternative debt relief options or debt professionals that could possibly give you protection from your creditors.

It is important to work with just the right trustee. You will however need to uphold honesty and open up concerning your financial situation to get the most out of their services and create a fair ground on which you can discuss any and all debt issues you are having.

You are very likely to spend lots of time with your trustee. Hence, you should make it your top priority to choose someone with whom you get along well with and one who will work their hardest for you.

Did you find this helpful? Sharing with friends could be of great help even if you do not require the services of a licensed insolvency trustee.

Debt Management reference:

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Last update on 2017-10-17 / Affiliate links / Images from Amazon Product Advertising API

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