Debt Options Guide
What Is a Licensed Insolvency Trustee?
Updated
A Licensed Insolvency Trustee (LIT) is a federally licensed professional — regulated by the Office of the Superintendent of Bankruptcy — and the only person in Canada who can file a consumer proposal or a bankruptcy. Most trustees offer a free, no-obligation first consultation, and their fees are set by law.
What a trustee actually does
- Reviews your full financial picture and explains all options: budgeting, credit counselling, consolidation, a consumer proposal or bankruptcy
- Prepares and files consumer proposals and bankruptcies with the OSB
- Negotiates with creditors and holds creditor meetings when required
- Delivers the two mandatory financial counselling sessions
- Distributes your payments to creditors
Trustee vs. debt settlement company
Unlicensed debt settlement or 'debt relief' companies cannot file a legally binding proposal; many charge up-front fees and then refer clients to a trustee anyway. If a company is not a Licensed Insolvency Trustee or a non-profit credit counsellor, ask exactly what it can legally do for you before paying anything.
What to bring to your first meeting
- A list of every debt: creditor, balance, and whether it is secured
- Recent pay stubs or proof of income for everyone in the household
- Your monthly budget — rent or mortgage, utilities, transportation, child care
- Your most recent notice of assessment from the CRA
- Any collection letters, court papers or garnishment notices
How to check a trustee's licence
The Office of the Superintendent of Bankruptcy maintains the public list of Licensed Insolvency Trustees. Search for the individual or firm name before you sign anything, and confirm that the person handling your file is licensed.
Free tools
Related guides
- Consumer Proposal in Canada: How It WorksHow a consumer proposal works in Canada: who qualifies, the $250,000 limit, the 5-year maximum, the creditor vote, credit impact and what it costs.
- Bankruptcy in Canada: How It WorksHow personal bankruptcy works in Canada: the 9 or 21 month discharge, surplus income, exempt assets, which debts survive and how long it stays on your credit report.
- Your Rights When a Collection Agency CallsWhat collection agencies can and can't do in Canada, how to verify a debt, limitation periods by province, and which provincial regulator to complain to.
Sources
- Office of the Superintendent of Bankruptcy Canada
- Bankruptcy and Insolvency Act (Justice Laws)
- Financial Consumer Agency of Canada
DebtDefender is an independent information site, not a Licensed Insolvency Trustee or law firm. This guide is general information, not advice for your situation. See our disclaimer.