Late in 2015, the Office of the Superintendent of Bankruptcy (OSB) announced upcoming changes to the insolvency professional designation throughout Canada. Effective April 1st, professionals formerly designated as Insolvency or Bankruptcy Trustees are now known as Licensed Insolvency Trustees – or LIT for short.
Licensed Insolvency Trustees are the only professionals legally empowered to help Canadians restructure their debts via legislated mechanisms such as Consumer Proposals and Bankruptcy In order to obtain this licensing from the OSB, individuals must meet government qualifications and have successfully completed a specialized accreditation program and gained relevant industry experience. Licensed Insolvency Trustees may also hold a designation with the Canadian Association of Insolvency & Restructuring Professionals (CAIRP), which denotes the professional’s abidance of high professional standards, code of ethics and rules of professional conduct.
As many Canadians view bankruptcy as an ultimate last resort, the ability of Licensed Insolvency Trustees to offer a variety of resources and not solely bankruptcy is emphasized with the new designation. Consumer Proposals in particular, are a legislated solution that has gained popularity in recent years, but is still relatively unknown to many consumers.
While programs offered through debt consultants or traditional credit counsellors may resemble the benefits of a Consumer Proposal, they are in fact very different and do not offer the same protection. Furthermore, many consumers are unaware that only a Licensed Insolvency Trustee can offer the remedy of a Consumer Proposal. A recent survey found that 60% of respondents mistakenly agreed that employees of debt settlement companies or credit counselling agencies are federally or provincially licensed debt-relief professionals.1 The fact is that there is only ONE professional licensed by the Federal Government in Canada to assist you in dealing with your debts – a Licensed Insolvency Trustee. When facing financial difficulties it is imperative that Canadian consumers become fully informed about their legal rights and options, and Licensed Insolvency Trustees provide this information for free, with no obligation to commit to a formal proceeding.
Sands & Associates is a multi-year Consumer Choice Award winner, celebrating over 29 years of helping BC residents become debt-free. To meet in one of our local offices, please contact us for a free, confidential debt consultation.