Over the summer, it was reported that the Office of the Superintendent of Bankruptcy (OSB), the federal government agency that regulates the handling of insolvency in Canada, would be changing the way we refer to bankruptcy trustees. As of April 2016, instead of Trustee in Bankruptcy, trustees will be called Licensed Insolvency Trustees (LITs).
This might not seem like big news to the average Canadian, but it’s actually a huge step forward for the industry for a few reasons.
The first is trustees are finally getting rid of the word ‘bankruptcy’ in their name. The word bankruptcy does nothing for their image – it brings up feelings of failure, shame and guilt. It doesn’t talk about the fact that before you file for bankruptcy, you’ve run out of options and you need help. It doesn’t lend itself to conversations about starting over, wiping the slate clean, or even simply dealing with the problem at hand.
Secondly, with bankruptcy out of the way, the focus can be that trustees are so much more than officials helping people file for bankruptcy. Did you know that they also help companies resolve debt problems? Or that trustees don’t just offer bankruptcy as an option to deal with your debt, but that you can also get a consumer proposal, which is where they make a deal with your creditors to stop interest accumulation, decrease how much you owe, and/or get an extension on the time you have to pay? All of those options aren’t obvious in the name ‘Trustee in Bankruptcy.’ Again, all you hear is ‘bankruptcy.’
Finally, this name will set them apart from other ‘insolvency experts’ or ‘insolvency consultants’ who claim to be able to help you with your debt. When you compare the two names, Trustees in Bankruptcy and ‘insolvency consultant,’ it sounds like they can offer more options than a trustee can. The truth is trustees are the only officials who are licensed to offer consumer proposals and bankruptcies. Insolvency consultants aren’t. And trustees offer a free consultation, where you get to sit down and talk your trustee through your situation, so that they can give you the best advice for your situation based on their knowledge of the laws surrounding insolvency, which they learned during the extensive accreditation process to become licensed trustees. Being known as LIT will give trustees the ability to communicate that they are more than just bankruptcy experts – they’re insolvency and restructuring professionals who can help you figure out your next steps and support you the entire way..