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Insolvency Trustee Frequently Asked Questions & Answers
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Insolvency Trustee FAQs
What is a Bankruptcy Trustee?
A Bankruptcy Trustee is the only individual in Canada allowed to administer the personal bankruptcy process or act as an administrator under a Consumer Proposal. A bankruptcy trustee gets their authority from the Bankruptcy and Insolvency Act and is considered an Officer of the Court and is licensed by the Office of the Superintendent of Bankruptcy to oversee the process and provide information to debtors and creditors as the navigate the bankruptcy process.
A Bankruptcy Trustee is not acting as your personal representative, or advocate through the process, but is overseeing the process both for you and your creditors. A Trustee’s job is to administer the Bankruptcy and Insolvency Act and treat debtors and creditors fairly as outlined under the Act. A Trustee will collect your assets above what is considered Exempt, monitor your Monthly Income, provide Debt Counselling, assist your creditors in understanding their rights, Apply for your Discharge from Bankruptcy, or Notify your Creditors that your Proposal has been completed, and then distribute any Dividends to your Creditors, while all the while advising and updating the Office of the Superintendent of Bankruptcy and the Court (if applicable) of the entire process.
A Trustee sort of acts like a police office directing traffic as debtors and creditors navigate their way through the insolvency legislation.
Bankruptcy Trustees are considered Officers of the Court and their job is to administer the requirements of the Bankruptcy and Insolvency Act that outline the rights, duties, and obligations of debtors, creditors and the Trustee. Bankruptcy Trustees’, however, can do more than deal with bankruptcies and Proposals; they can advise you in all aspects of your financial dealings, including helping you prepare a budget, the proper use of credit products and facilities, and how to rebuild your credit rating.
Can anyone be a Licensed Insolvency Trustee?
To become a Bankruptcy Trustee generally the first step is to obtain a 4-year university Degree and then complete an in-depth 3-year course of study and examination. Once a candidate has qualified and passes all of the written tests, an Oral Board of Examination is set where the Office of the Superintendent of Bankruptcy, a lawyer who is familiar with insolvency law and a working Trustee review the potential Trustee for their level of competency. Only if all of these tests are passed will the Office of the Superintendent of Bankruptcy issue a license to practice to the Trustee.
A Bankruptcy Trustee is a highly respect insolvency professional. The Trustee designation signifies years of in-depth study, work experience, competence and commitment to the highest of professional ethics and objectivity. In Canada approximately 95% of Bankruptcy Trustee’s are members of the CAIRP (Canadian Association of Insolvency and Restructuring Professionals). Chartered Insolvency and Restructuring Professionals (CIRP) must maintain highest standards of conduct. The Rules of Professional Conduct, which set these high standards, are, first and foremost, to protect the public. Secondly, they are to ensure that all parties are treated with respect, courtesy and integrity.
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