What’s a Licensed Insolvency Trustee? Who Needs One?

Is mounting debt keeping you up at night? Are creditors aggressively pursuing collections? When money becomes an issue, it can seem like the harder you try, the worse things get.

To obtain professional guidance, mentorship, and develop an effective debt-relief strategy, consider talking to a licensed insolvency trustee (LIT).

A LIT can assess your situation, explain the possible outcomes, and help you determine the best course of action. But, when is the right time to call a LIT?

What Is a Licensed Insolvency Trustee?

A LIT is a federally regulated professional who advises clients with severe debt problems. LITs have the authority to schedule and run government-regulated insolvency proceedings to reach an agreement between you and your creditors. If you’re on the brink of bankruptcy, a LIT puts a plan in place to free you of your debts and help you make a fresh start.

LITs obtain their licenses from the Office of the Superintendent of Bankruptcy (OSB). To qualify, they must meet the following requirements:

  • Pass the Chartered Insolvency and Restructuring Professional (CIRP) Qualification Program (CQP), the CIRP National Insolvency Exam, and the Insolvency Counsellor’s Qualification Course, or the Practical Course on Insolvency Counselling
  • Pass the Oral Board of Examination
  • Have good character and reputation
  • Be solvent

It typically takes two and a half years or more to complete the steps, and ongoing education is mandatory.

What Services Are Offered By a Licensed Insolvency Trustee?

The primary services provided by a LIT are administering bankruptcies and consumer proposals. Both strategies help eliminate your debts, but one may be preferable depending on your circumstances.

For example, a consumer proposal is less severe because you often relinquish assets during a bankruptcy and your repayments vary with your income. In contrast, consumer proposals help protect your assets and let you repay creditors with fixed monthly payments.

The main differences are:

  1. You typically forfeit more personal assets in bankruptcy
  2. Bankruptcy has a larger impact on your credit score
  3. An initial bankruptcy will stay on your credit report for six years versus three years with a consumer proposal

To learn more about whether a consumer proposal is right for you, please see our Consumer Proposal Guide. The manual breaks down how a consumer proposal works, the role of a LIT, and much more.

 

What Does It Cost to Consult With a Licensed Insolvency Trustee?

Depending on the services rendered, a LIT can cost anywhere from a few hundred to a few thousand dollars. However, the charges are federally regulated and the first consultation is free.

When you file for bankruptcy, you must disclose your income, expenses, assets, and debts. Then, your LIT costs depend on whether you have “Surplus Income.” The federal government uses income thresholds to ensure Canadians maintain a minimum standard of living:

  • If your income exceeds the minimum threshold, half of the ‘surplus’ goes to your creditors, and the LIT collects his or her fees from that amount and/or the sale of your assets.
  • If you don’t have Surplus Income, your out-of-pocket costs vary based on your income, and you typically repay the LIT in installments over time.

As for a consumer proposal, the cost typically ranges from $6,000 to $7,000. However, the expenses are subtracted from the gross amount offered to creditors, which means if they accept, you don’t owe anything else. In other words, the LIT’s fees are included and deducted from the proposal.

Are There Free Tools to Increase My Credit Knowledge?

Yes. If you’re learning from past mistakes or want to develop responsible credit habits, Borrowell is a free service that may fit your needs. The fintech provides over three million Canadians with free weekly credit scores and report monitoring. The three advantages of Borrowell Canada include:

  1. Monitor & Track
  2. Understand & improve
  3. Find the Right Product

By monitoring your credit report, you can track your success, flag errors, and spot fraudulent activity. In addition, Borrowell provides access to an AI-powered Credit Coach named Molly, who gives users personalized tips, articles, and tools to become more credit-conscious. Finally, Borrowell also markets financial products from its 75+ partners that you may find useful.

Of course, there is no obligation to purchase anything, and you can enjoy the company’s credit-building resources for free. For more information on what Borrwell has to offer, please see our Borrowell Credit Report Review.

How to Find a Licensed Insolvency Trustee In Your Province

When debt becomes unmanageable, it’s best to seek local advice. Our list below includes the contract information for reputable LITs located in major metropolitan cities across Canada.

Montreal, Quebec

Pierre Roy & Associés

  • Phone Number: 1-514-375-1965
  • Address: 3982 Wellington St Bureau 205, Verdun, Quebec H4G 1V3
  • Website: https://pierreroy.com/en/

Toronto, Ontario

Hoyes, Michalos & Associates

SPERGEL

Morataya Corp

  • Phone Number: 1-416-784-0904
  • Address: 3200 Dufferin St Suite #307, Toronto, ON M6A 3B2
  • Website: https://morataya.ca/

Fong & Partners Inc

Moncton, New Brunswick

Allan Marshall & Associates

  • Phone Number: 1-506-384-7850
  • Address: 505A St. George St, Moncton, NB E1C 1Y4
  • Website: https://wecanhelp.ca/

MNP Debt

  • Phone Number: 1-506-805-0174
  • Address: 272 St. George St Suite 200, Moncton, NB E1C 1W6
  • Website: https://mnpdebt.ca

Powell Associates Ltd.

Halifax, Nova Scotia

Powell Associates Ltd.

MNP Debt

  • Phone Number: 1-902-454-7934
  • Address: 6080 Young St Suite 912, Halifax, NS B3K 5L2
  • Website: https://mnpdebt.ca

Grant Thornton Limited

Allan Marshall & Associates

  • Phone Number: 1-902-425-7850
  • Address: 362 Lacewood Dr #207, Halifax, NS B3S 1M7
  • Website: https://wecanhelp.ca/

Charlottetown, Prince Edward Island

MNP Debt

  • Phone Number: 1-902-892-2010
  • Address: 230 Belvedere Ave, Charlottetown, PE C1A 6X8
  • Website: https://mnpdebt.ca

Allan Marshall & Associates

  • Phone Number: 1-902-894-7851
  • Address: 410 Mt Edward Rd Unit#1, Charlottetown, PE C1E 2A1
  • Website: https://wecanhelp.ca/

Grant Thornton Limited

  1. John’s, Newfoundland

Janes & Noseworthy Limited

S.R. Stack & Company Ltd.

  • Phone Number: 1-709-221-5500
  • Address: 86 Elizabeth Ave, St. John’s, NL A1A 1W7
  • Website: https://srstack.ca/

Winnipeg, Manitoba

MNP Debt

  • Phone Number: 1-204-336-6167
  • Address: 242 Hargrave St 12th Floor, Winnipeg, MB R3C 0T8
  • Website: https://mnpdebt.ca

Grant Thornton Limited

Lazer Grant

C. Buhler & Associates Ltd.

Saskatoon, Saskatchewan

MNP Debt

  • Phone Number: 1-306-664-8334
  • Address: 119 4th Ave S #800, Saskatoon, SK S7K 5X2
  • Website: https://mnpdebt.ca

SPERGEL

  • Phone Number: 1-306-341-1660
  • Address: 2366 Ave C North Suite 260, Saskatoon, SK S7L 5X5
  • Website: https://www.spergel.ca/

Calgary, Alberta

MNP Debt

  • Phone Number: 1-403-538-3187
  • Address: 112 4 Ave SW Suite 2000, Calgary, AB T2P 0H3
  • Website: https://mnpdebt.ca

Bromwich+Smith

Cameron Okolita

Hudson & Company

Vancouver, British Columbia

Sands & Associates

MNP Debt

  • Phone Number: 1-604-639-0001
  • Address: 609 Granville St #1630, Vancouver, BC V7Y 1E7
  • Website: https://mnpdebt.ca

Grant Thornton Limited

D Thode & Associates Inc.

Yellowknife, Northwest Territories

C. Buhler & Associates Ltd.

Iqaluit, Nunavut

C. Buhler & Associates Ltd.

Whitehorse, Yukon

MNP Debt

  • Phone Number: 1-250-979-2580
  • Address: 411 Main St, Whitehorse, YT Y1A 2B6
  • Website: https://mnpdebt.ca

Conclusion

When debt problems have you struggling to stay afloat, you don’t need to suffer alone. Consulting with a LIT and developing a practical strategy benefits your financial and mental health. Furthermore, the coaching received along the way can empower you with the tools and knowledge to avoid debt missteps in the future.

As a result, the benefits of seeking professional help greatly outweigh the costs.

Alex Demolitor

Alex Demolitor is a Canadian financial writer hailing from Halifax, NS. Alex has a Bachelors Degree from King's College and passed the CFA Exam Level III. He specializes in fundamental analysis of the stock, bond, commodity, and FX markets. He also covers US & Canadian economic indicators.