If you or some you know is struggling with their financial situation, there is still hope. As Reynolds and Associates will describe today, a Licensed Insolvency Trustee (LIT) might be the professional you need to finally conquer debt and start on the path to financial freedom.
Content in this Article
What is a Licensed Insolvency Trustee?
A Licensed Insolvency Trustee (LIT) is a trained professional who helps people reduce their debt, bring their finances into order and provides helpful information for those who want to learn more about effectively managing their finances.
How Are Licensed Insolvency Trustees Trained?
The training process for Licensed Insolvency Trustees (LIT) is robust and lengthy. It involves working closely with both the Canadian Association of Insolvency and Restructuring Professionals (CAIRP) and the Office of the Superintendent of Bankruptcy (OSB). The OSB is responsible for certifying and governing LITs, whereas CAIRP is responsible for training, testing and examining suitable candidates.
What Services Do Licensed Insolvency Trustees Offer?
Several services are offered by LITs. These services include consumer proposals, bankruptcy, financial literacy training and debt counselling. Let’s look at how LITs perform each of these services in a bit more detail.
The service LITs are most well-known for is their consumer proposals. These proposals are sent to debtors like credit card companies or mortgage lenders and lay out a specific set of circumstances for them to agree to, regarding the client. These circumstances include removing any interest payments, reducing the principal amount owed and stopping any phone calls or harassment.
For those who cannot go through the consumer proposal process, bankruptcy might be a viable option. In Canada, you can only file bankruptcy after consulting with a LIT, as it helps prevent fraud and mistakes, among other things. The OSB-licensed professionals assist those filing for bankruptcy by completing the appropriate documentation and paperwork, offering the required financial literacy training and attempting to get the best deal possible for their clients.
Debt Counselling/ Financial literacy training
Financial literacy training and debt counselling are very similar. These services, offered by LITs, are designed to help educate clients struggling with debt. They work through how to save money, set a monthly budget and manage purchases effectively. They are a great help for those looking to get a better handle on their finances. Attending these courses is also a requirement for post-bankruptcy filing.
Professional and certified LITs also offer their services for struggling business owners. The services are largely unchanged, in that consumer proposals and bankruptcy are the central aim. How the process is executed, however, may vary depending on the opportunities available to businesses or individuals.
How Licensed Insolvency Trustees Differ from Payday Loans or Other Financial Assistance Programs
Many different avenues exist for those struggling to pay bills on time or keep their credit in check. These services include short-term and consolidation loans, for example. While these services can provide benefits in the short term, they often act like a wound disguised as a band-aid, offering help that eventually becomes more troublesome than the original repayment.
When it comes to LITs, by contrast, they are held to a code of ethics, first and foremost. Plus, they are overseen by a branch of the federal government, namely the OSB we referred to earlier. These two stipulations ensure that LITs remain honest, work diligently to provide the best results for their clients and maintain a growing knowledge base about their work and industry.