Trustee Role In Consumer Proposal
What is the Role of The Trustee in a Consumer Proposal?
A trustee is not a lawyer, and they do not work for you.
They act as a representative of the debtor.
You are required to use the assistance of a trustee to file a Consumer Proposal.
Licensed Insolvency Trustees (LITs) are the only professionals legally entitled by the Office of the Superintendent of Bankruptcy to administer Consumer Proposals and bankruptcies.
They play the role of referee between the debtor and the creditor(s).
They will ensure that both parties have all the information necessary to make informed decisions.
The trustee will review your situation, provide you information on your options, and advise you on the best course of action.
He/she is also the one who will file your Consumer Proposal to the Office of the Superintendent of Bankruptcy.
The Main Responsibilities of the Trustee
Consumer Proposals are filed electronically.
You’ll have to fill out all the necessary paperwork and sign them, then the trustee will enter electronically the same information to legally file your Consumer Proposal.
The trustee is your first point of contact to initiate the process.
They will provide you with the initial free of charge consultation.
After the bankruptcy paperwork has been filed the trustee will:
- Ensure the debtor and creditor(s) follows the rules;
- Ensure the paperwork is properly filled out;
- Electronically file the paperwork to the Office of Superintendent of Bankruptcy;
- Notify your creditor(s) that you’ve filed for a Consumer Proposal and send them a copy of all the paperwork;
- Guide you through the entire process until the Certificate of Completion is obtained;
- Collect and remit the proposal payments;
- Suggest repayment terms after analyzing your financial situation;
- Ensure that you attend the two mandatory insolvency sessions;
- Obtain the Certificate of Completion on your behalf.
Why are Trustees Important in the Proposal Process?
Without a trustee you cannot file for a Consumer Proposal.
While they assist you throughout the process, they also act as referee for both parties.
Trustees are neutral, but if you do not adhere to your responsibilities they can penalize you with their report to the Office of the Superintendent of Bankruptcy that may result in a denial of the Certificate of Completion.
The service of a trustee involves no up front fees.
Our trustees also provide free consultations.
The cost of the consumer proposal is based on your debt and the amount you can afford to pay.
The Bankruptcy and Insolvency Act sets the costs of a debt proposal.
Without a trustee, you might find it difficult dealing with your creditors.
You will not be able to file your debt proposal.
If you’ve filed your Consumer Proposal and are still getting calls for payment from your creditors, all you need to do is to provide them with the contact of your trustee and inform your trustee who will then let your creditors know what a Consumer Proposal is and what they need to do.
Your creditors have 45 days to respond to your Consumer Proposal either by accepting it or refusing it.
During that period, they cannot collect payment nor take any other legal actions against you.
Where to Find a Trustee
The Bankruptcy and Insolvency Act requires that you find a trustee in the area where you have lived and worked for the past year and where your assets are located.
When you’re searching for a trustee and arranging for the initial consultation, it’s not mandatory that you file your Consumer Proposal with the same trustee you’ve had the initial consultation.
You should choose the trustee you’re most comfortable with as you will have to share information about your financial situation with them.
The internet is a great source of information to find a trustee in your area.
The official site of the Office of the Superintendent of Bankruptcy can also point you in the right direction.
Obviously there are friends and family who can provide recommendations based on their experience.