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| A Licensed Insolvency Trustee helps by reviewing your full financial situation, explaining all available debt relief options and administering consumer proposals or bankruptcies when needed. LITs are federally regulated professionals, which makes them different from unregulated debt advisors or debt settlement companies. |
What a Licensed Insolvency Trustee does
A Licensed Insolvency Trustee, often called an LIT, is a federally regulated professional who helps individuals and businesses deal with debt problems. An LIT can explain informal options, review formal legal options and administer consumer proposals and bankruptcies.
This matters because debt is not only a math problem. It can involve collection calls, wage garnishment, tax debt, assets, income, family obligations and credit impact. A trustee helps you look at the full picture. Learn more about what a Licensed Insolvency Trustee is from the Office of the Superintendent of Bankruptcy.
The first meeting is about understanding your situation
During an initial consultation, the trustee or debt solutions professional will usually ask about income, monthly expenses, debts, assets, family size and creditor pressure. This is not about judging you. It is about understanding what options are realistic.
Someone with steady income and assets may need a different solution than someone with limited income and no ability to repay. Someone facing wage garnishment may need legal protection quickly. Someone who is current but overwhelmed may have more time to compare options.
LITs explain all options
A Licensed Insolvency Trustee should explain the options available to you, not push only one solution. These options may include budgeting, creditor negotiation, credit counselling, debt consolidation, a debt management plan, a consumer proposal or bankruptcy.
The best option depends on your goals. You may want to reduce payments, stop interest, protect assets, deal with tax debt, stop collection action or avoid bankruptcy. Each goal may point to a different solution. Explore the full range of debt relief options.
LITs can file consumer proposals
Only a Licensed Insolvency Trustee can administer a consumer proposal. A consumer proposal is a legal agreement where you offer to repay creditors based on what you can afford. It may reduce unsecured debt, stop interest and combine payments into one monthly amount. Official information is available from the Office of the Superintendent of Bankruptcy on consumer proposals.
Once filed, a consumer proposal gives legal protection from most unsecured creditors included in the proposal. This is one reason people speak with a trustee when informal payments are no longer working.
LITs can administer bankruptcy
Bankruptcy is also administered by a Licensed Insolvency Trustee. Bankruptcy may be considered when a proposal is not affordable or when there is no realistic way to repay the debt. The trustee explains your duties, payments, required counselling and discharge process.
Even if you are afraid of bankruptcy, speaking with a trustee can help because you may learn that other options are available.
LITs help stop confusion
Many people dealing with debt receive mixed advice from lenders, family, collection agents, online ads and debt settlement companies. A trustee can help separate what is possible from what is risky. Consumers should also review the Financial Consumer Agency of Canada debt help alert.
For example, borrowing more money may help if the interest rate is lower and the payment is affordable. It may hurt if the new loan has a high rate or only delays a deeper problem. A trustee can help you compare the numbers before you commit.
LITs also provide required counselling
Consumer proposals and bankruptcies include counselling sessions. These sessions are designed to help people understand budgeting, credit use and ways to rebuild financial stability after filing.
The main takeaway
A Licensed Insolvency Trustee helps you understand your options and choose a path that fits your actual situation. If you are unsure whether you need a consumer proposal, bankruptcy, consolidation or credit counselling, speaking with an LIT is often the safest place to start. David Sklar & Associates are Licensed Insolvency Trustees — learn more on their We are LITs page.
Frequently asked questions
Is meeting with a Licensed Insolvency Trustee free?
Many trustees offer a free initial consultation. David Sklar & Associates offers a confidential consultation to review your options.
Can an LIT stop collection calls?
If you file a consumer proposal or bankruptcy, most unsecured creditors included in the filing must stop collection action.
Is an LIT the same as a debt settlement company?
No. LITs are federally regulated and can administer consumer proposals and bankruptcies. Debt settlement companies cannot do that unless they employ or refer to an LIT.
Speak with a Licensed Insolvency Trustee
Speak with David Sklar & Associates for a confidential review of your debt, income, assets and monthly budget. A Licensed Insolvency Trustee can explain your options and help you choose a realistic next step. Book a free consultation today.
