Bankruptcy Trustee & Licensed Insolvency Trustee – What’s the difference?
What is a Licensed Insolvency Trustee?
The terms Insolvency and bankruptcy are used in similar ways, when in fact, insolvency is a financial state whereas bankruptcy is a legal concept. Insolvency is a term that applies when a legal entity (a person or corporation) has debt that exceed their assets or when an entity can no longer pay their debts when they become due. Bankruptcy is a legal process where an entity (an individual or Corporation) voluntarily or by court order assigns all of their assets over to a Trustee for the benefits of their creditors. If you are having financial problems please call Hudson & Company to speak with one of our highly qualified Licensed Insolvency Trustees to guide your through the misunderstandings regarding bankruptcies and insolvency matters
What was commonly referred to as a bankruptcy trustee is now known by the new term Licensed Insolvency Trustee. While the two terms are interchangeable the new term incorporates more of what a Trustee does on a daily basis which is not limited solely to bankruptcies but includes the filing of Proposals.
Licenced Insolvency Trustees are highly trained individuals who have obtained the designation of a Certified Insolvency Restructuring Professionals (“CIRP”) and been licensed by the government as a Licensed Insolvency Trustee. To obtain the designation of a CIRP a trustee must complete a three-module self studied course and pass a competency based national exam. Once that is achieved, a trustee must pass a oral Board and be presented with a license from the, the Office of the Superintendent of Bankruptcy(“ OSB”).
These trustees are there to help their clients by giving them the full range of options to better deal with their financial situation. While their two main jobs are to take a client’s assets and sell them and then pay the creditors with the recovered money, their job description also includes a host of other things. They are there to help clients who find themselves in situations where debt counselling is needed, they can work with clients to help make a proposal to avoid personal bankruptcy all together, they can make arrangements with individual creditors to solve the situation on the client’s behalf and they are able to negotiate settlement agreements. They also have the power to deal directly with creditors once a personal bankruptcy order has been filed which will ensure that no other unsecured creditors can initiate legal action against their client.
Since they are the only professionals that are authorized to administer government regulated insolvency proceedings on their client’s behalf, they are also federally regulated in terms of standards of practice and they must always adhere to the code of ethics set in place by the Office of the Superintendent of Bankruptcy. They have continuing oversight from that office and their fees are also strictly regulated by the federal government which means you are treated fairly when it comes to payments regardless of which Licenced Insolvency Trustee you choose to work with.