Licensed Insolvency Trustees (LITs) are highly qualified debt management professionals who are federally regulated. LITs are the only professionals who can file Consumer Proposals and Bankruptcies — insolvency proceedings that allow you to be discharged from your debt — on behalf of both individuals and corporations. Licensed through the Office of the Superintendent of Bankruptcy, LITs adhere to a firm code of ethics and strict government regulations.
The role of an LIT is to do a thorough review of your unique financial situation and to ensure that your rights are not abused while also protecting the rights of your creditors. In the case of a Proposal or Bankruptcy, they act as a third party to deal directly with creditors on your behalf.
If your debt can be managed without a formal insolvency proceeding, they can provide advice about changes you can make to your financial situation or habits, so you can reduce your debt burden and pay back your creditors without using a third-party intermediary.
Most LITs throughout Canada, including MNP Debt, offer their initial consultation for free.
Anyone can offer debt relief advice or services in Canada but not all are licensed by the federal government to act as a Licensed Insolvency Trustee. In order to best protect consumers and corporations struggling with insolvency, the Office of the Superintendent of Bankruptcy has indicated that they will be more aggressive in sanctioning parties who attempt to identify themselves as providing the same services as Licensed Insolvency Trustees without in fact being licenced to do so.
There are several differences between a Licensed Insolvency Trustee and an unlicensed debt consultant. These include:
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Let’s review what a Consumer Proposal is, as well as the pros and cons of filing a Proposal, to help you determine if it’s the right solution for your unique situation.
