Licensed insolvency trustees (LIT) are the professionals who can allow you to discharge your debts using bankruptcies and consumer proposals. If you are under financial difficulty and cannot pay off your debts, you can hire the help of a LIT. So how much do these professionals get paid? These experts cannot set their salaries because they get paid from the bankruptcy accounts of their clients.
Let’s know more about this topic below.
What Are the Services of LIT?
Like other credit counsellors and debt consultants, LIT professionals offer a solution to debt consolidation. A LIT professional is an officer in the court who can monitor the insolvency case under the bankruptcy and insolvency act. Mainly, LITs are allowed to manage, file, and monitor bankruptcies and proposals. In addition, when they file consumer proposals or bankruptcy, the professional will guide the borrower through the process and prepare the necessary things to deal with the lender.
How Are the Fees of a LIT Determined?
The fee of a LIT is calculated from the money of the individual bankruptcy accounts or consumer proposal. A trustee will not be able to set their prices. In most cases of consumer proposals and bankruptcies, the BIA determines the fees of a trustee. Unlike other departments, when you work with a LIT, it’s no fee for the service, which means, unlike a lawyer, you will not have to pay a charge for getting a suggestion through phone call or support.
How Much is the Fee of a LIT for a Bankruptcy Case?
After talking to a LIT professional, the expert determines that your income isn’t sufficient enough, and you haven’t been bankrupt before. In that case, you may have to pay $2300 for an administration of bankruptcy. Since most debtors cannot pay off the entire amount immediately, this is managed in segments. You can start with $500 at first and pay off the $225 for eight months in the 9-month bankruptcy period. If you can repay the payment without filing for bankruptcy, you can go for a consumer proposal.
What Should be the Payment of a LIT for a Consumer Proposal?
Consumer proposals depend on the debtor’s situation, so it will not be possible to decide on a direct figure amount. The creditors mainly handle the fees based on tariffs, and the debtor does not have to make any payments. For instance, if you have filed a consumer proposal for $300 each month for three years, then you have to pay only three hundred dollars when you file the consumer proposal, which will be counted as the payment of the entire proposal. After this, you will have to keep making payments until you pay it off. You won’t have to pay anything extra to the trustee.
Costs Included in the Consumer Proposal Filing
During a consumer proposal or bankruptcy filing, there will be additional fees, and you have to pay them to the LIT professional. It can include the costs of:
- Charges of personal property registry search
- Preparation and filing of tax returns
- Monetary counselling sessions
- Fees of the government to legitimise the consumer proposal or bankruptcy
What Are the Requirements to Become a LIT?
To get the designation of a LIT, you must get a licence from OSB. To get the licence, you have to complete a program called CIRP.
To become a successful LIT, you must have the qualifications such as:
- Be debt free
- Must have a good reputation and a character
- You must complete the CIRP
- Pass the oral exam and must have 2400 hours of experience in insolvency.
After you have met all these traits, you can apply online for a trustee job. Most LIT professionals work with a firm or alone. You can learn more about it from OSB.
What Other Things Needed to Become a LIT?
Other than the licence, you will also have to meet additional requirements allowing you to work as a trustee. For instance, if you want to work as a practitioner, you must:
- Have enough fidelity and liability insurance
- Have enough facilities to monitor the professional work in the district
- Have enough financial strength to handle the professional work
- Not practice improper activities
Hopefully, this gave you some insight regarding licensed insolvency trustees (LIT) – whether that be to figure out debts or to find a career as one!