There are a lot of companies out there that promise ways to get debt free. It can be hard to tell which companies can really help you and which ones are just going to make the problem worse. Finding the right solution for your financial situation is essential for people who are deeply indebted. One of the terms you may encounter as you look for a debt solution is “licensed insolvency trustee,” and it’s worth knowing what it means and how they can help.
What Is a Licensed Insolvency Trustee?
A licensed insolvency trustee is a professional who will file your bankruptcy or consumer proposal. These are debt relief solutions that legally bind your creditors, preventing them from taking further collection actions and giving the debtor some kind of debt forgiveness based on their finances.
In jurisdictions like Canada, licensed insolvency trustees are the only professionals who can file your bankruptcy, rather than a lawyer. Likewise, other debt solution companies that provide things like consolidation loans or debt management plans cannot arrange consumer proposals.
According to certified experts at Debthelpbc.ca, you could wind up paying as little as 20 to 30 percent of your total unsecured debts with a consumer proposal, without having to part with any assets. You can pay that remaining debt in monthly installments over 5 years without interest. It will affect your credit score, but it is a highly effective form of debt relief.
What Does a Licensed Insolvency Trustee Do?
There are several services a licensed insolvency trustee provides:
- Evaluating your finances to find an appropriate debt solution
- Filing for a bankruptcy or a consumer proposal
- Provide credit counselling as part of debt relief to get you back on track
When you file a consumer proposal or a bankruptcy, any assets or payments being used to repay your creditors is held in trust by the licensed insolvency trustee who then disburses them to the creditors.
How Much Are Licensed Insolvency Trustee Fees?
Licensed insolvency trustees are independent professionals. Although they are closely regulated, they are not government employees, nor do they work for creditors.
So, who pays them? Licensed insolvency trustee fees are taken out of the payments that debtors make to creditors.In a consumer proposal, you make monthly payments, while in a bankruptcy, you may have to pay a portion of surplus income. The fees are taken out of that money.
Should You Call a Licensed Insolvency Trustee?
Bankruptcy may be financial last resort, but in some cases, it can actually really help you. Keep an eye out for these signs of financial danger:
- Making minimum payments on credit card bills
- Skipping and missing payments altogether
- Taking out payday loans
- Relying on your credit card for basic expenses
Paying back debt on your own can take a long time and it will be expensive due to the interest rates. Bankruptcy or a consumer proposal can make it less expensive and give you a clear framework for getting out of debt instead of struggling along indefinitely.