What is a Licensed Insolvency Trustee (LIT)?
When you’re researching your options for getting control of your debt, you may find yourself confused by the vast array of terms out there – both for the options and the people who provide and manage them. This week, in an effort to clear some of the confusion, we are covering one crucial term – Licensed Insolvency Trustee.
A Licensed Insolvency Trustee (LIT) is a federally regulated professional who provides advice and services to those with debt problems. They are authorized to administer government-regulated proceedings, such as consumer proposals and bankruptcies.
Often, when individuals start thinking about their options for dealing with problem debt, a bankruptcy trustee or Licensed Insolvency Trustee is the first person who comes to mind. However, there is the misconception that a trustee represents you. While a trustee does represent your interests, they are also representing your creditors’ interests. Their role is to negotiate a satisfactory arrangement for all involved.
Therein lies the problem. Once you provide information to your trustee, under the assumption that it is private, the trustee will then structure your bankruptcy accordingly (this is what they are required to do). Any information you provide is fair game and will be used to get the largest payout for your creditors. Furthermore, in the case of a consumer proposal, your Licensed Insolvency Trustee is paid based on the size of the proposal. This means that a larger proposal amount equals more revenue for them – there is no incentive to get you the best deal.
If you are struggling financially and are considering a consumer proposal or bankruptcy to help you regain control, the best thing you can do is speak with a financial consultant with experience helping people deal with problem debt.
Such a person, hired by you to represent you and only you, will review and structure your financial information based on that review and a realistic plan that you can afford. They will then present a solution to a trustee they know and trust, one they’ve had past dealings with, and co-ordinate the process and help you throughout.
When you’re drowning in debt, there are many benefits to bankruptcy or a consumer proposal. Both represent an important resource, you just need to be sure that the person standing beside you is actually concerned about your financial welfare.
At DebtCare, we know how best to protect you. Instead of heading straight to a Licensed Insolvency Trustee.
Call us first. We represent you. 1 (888) 890-0888.