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What is a Bankruptcy Trustee in Canada?

If you intend to file for bankruptcy in Canada, you need a bankruptcy trustee. A bankruptcy trustee is a licensed professional that helps you administer your bankruptcy or consumer proposal.

Apart from being a qualified debt advisor, a bankruptcy trustee in Canada evaluates your financial situation and enables you to understand your options.

A bankruptcy trustee has the responsibility of advising you on the best course of action, helps you prepare the necessary documents, and finalize the bankruptcy process from start to finish.

How a Bankruptcy Trustee works in Canada

Also known as a licensed insolvency trustee, a bankruptcy trustee in Canada is a professional that helps you administer your bankruptcy or consumer proposal. The Government of Canada approves them to carry out this service.

They can be likened to debt consultants, and they also deal with other debt issues besides bankruptcy. Bankruptcy trustees help you make informed choices on how to deal with your financial problems. Before you file for bankruptcy, your licensed trustee will consult you on whether or not you need to file for bankruptcy.

If you need to file for bankruptcy, your bankruptcy trustee will administer your bankruptcy proposal and guide you through the process without the need of a lawyer or going to court. The only reason the court will get involved is if you do not comply with the legal requirements.

Besides administering your bankruptcy proposal, your bankruptcy trustee also manages your assets held in trust after filing for bankruptcy, until it has been approved. Bankruptcy trustees are different from debt consulting agencies that charge you fees to advise you on your debts.

Bankruptcy trustees don’t usually charge for consultation. They ensure that every party involved in the bankruptcy process complies with their legally required duties and responsibilities. They work for the law in place of lawyers and the court.

How to Become a Bankruptcy Trustee in Canada

To become a bankruptcy trustee in Canada, one has to go through an educational program that includes a practical debt management experiment. The program usually runs from 2 to 5 years or more; it varies individually.

You have to pass the educational and practical requirements and take an oral exam scoring at least the pass mark of 50% to get your license. The oral exam is done by a Board of Examiners who only sit once a year. To be sure that you are working with a qualified bankruptcy trustee or to search for licensed bankruptcy trustees in your province or territory, click here.

Why You Need a Bankruptcy Trustee?

If you are considering filing for bankruptcy or want professional help dealing with your debts,  a bankruptcy trustee may be the best option for you. Below are some reasons why you should consider a bankruptcy trustee;

  • Qualified

They are the only professionals that can administer bankruptcy or consumer proposals in all of Canada. They are highly qualified, giving you the confidence and the assurance that you are dealing with someone who has the proper knowledge, experience, and skills to handle your financial situation.

  • Serve as middleman

They help you deal with your creditors on your behalf. This means that once your bankruptcy or consumer proposal has been filed, your creditors will only reach you through your bankruptcy trustee. In fact, unsecured creditors have no right to take any legal action against you after you’ve filed for bankruptcy.

  • Legally binding

They are federally regulated, and they must adhere to the standards of practice laid down by the federal government. Bankruptcy trustees are also required by a strict Code of Ethics for Trustees to explain all of the possible options available to you to solve your debt problems.

If you have issues that seem hard to resolve with your bankruptcy trustee, you can file a complaint with the OSB ( Office of the Superintendent of Bankruptcy), and your complaint will be reviewed and assessed.

  • Affordable

The federal government regulates their fees, so be rest assured that the costs won’t be high. They also don’t charge for the first consultation.

  • Availability

They are easy to find, and you can use your search engine to find them. Bankruptcy trustees are available across all the provinces and territories of Canada, even in remote places.

Conclusion

Whether you’ll need to file for bankruptcy or not depends on the outcome of your consultation with a bankruptcy trustee. It is advisable to share all information regarding your finance with your trustee to enable him/her to give the best advice and proffer solutions.

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