Simply put, a bankruptcy trustee is a professional who is licensed by the Government of Canada to administer your bankruptcy or consumer proposal. Only a licensed trustee in bankruptcy or licensed insolvency trustee can file a bankruptcy or proposal for you. They are trained specialists and very knowledgeable, not just about bankruptcy, but about debt in general. They will be able to explain to you, in detail, all available debt relief options.
1. Are bankruptcy trustee lawyers?
It can be a bit confusing to navigate the various titles involved and many people start out thinking they will require services of a lawyer in order to file for bankruptcy. Canadian law has actually found ways of working around this in order to make certain procedures more accessible and less expensive. Insolvency laws have been written in which a way that the minimize the use lawyers and the court for the majority of individual bankruptcy filings. Your trustee will be able to handle the entire matter and the court will only need to get involved if very complicated instances, or if someone fails to meet all the legal requirements stipulated.
2. What does a trustee do?
A frequently referenced, and apt, analogy to use when thinking of bankruptcy trustee, is that of a referee. They are neutral in the sense that they are not working for or against you, they are simply there to administer the existing rules of the process and be sure that all involved parties comply with their duties and responsibilities according to the law.
3. What is the difference between a trustee and debt consultant?
There is an important distinction to be made here between trustees and “debt consultants”. Due to the fact that all bankruptcy trustees has to be licensed, and can be found listed on the Superintendent of Bankruptcy website, they are who you will ultimately have to deal with if you decide to go through with a bankruptcy claim.
Debt consultants, on the other hand, are only able to assess your situation and provide you with information or guidance. Although they are not necessarily doing anything wrong or illegal, they will charge you an additional fee that would probably end up being covered by the cost of a trustee. In fact, most trustees will even meet with a potential client for free to help them assess the situation, so be careful when if you encounter consultancy or referral fees.
4. Why do I need a trustee?
Filing for bankruptcy is a complicated process and it needs to be done right. In addition, it is also the law that the claim is processed under the guidance of a licensed trustee. These professionals complete rigorous training over several years that involved a period of practical experience in debt management.
Once all the training has been completed, they sit an oral exam in front of the board and only about 50% of the applicants pass. This challenging training means that when you are dealing with a licensed trustee, you can rest assured that they truly are the most qualified person for the job. In fact, they are obligated by a strict code of conduct to explain all of your debt relief options.
5. Do I need a trustee?
If you’re confused about your current debt situation and are still not sure if bankruptcy is the answer for you, it is still a good idea to contact a local bankruptcy trustee in order to discuss your options. They will be able to look at your specific situation and give you sound advice as to the best way to solve it.