If you’ve been considering debt consolidation, you may have heard the terms “trustee in bankruptcy” and “debt counsellor.” But do you know the difference?

They’re far from the same thing. Here’s what you need to know.

Trustee in Bankruptcy

Also known as a Bankruptcy Trustee or Licensed Insolvency Trustee (LIT).

• Doesn’t represent you.
• Has to act for the creditors.
• If you reveal information to them, like an unclaimed asset in a bankruptcy, they are obligated to tell your creditors.
• A trustee can only offer you a consumer proposal or bankruptcy, not other debt consolidation options, like a loan or home equity products.
• They are paid based on the amount you declare in your bankruptcy or consumer proposal.

Debt Counsellor

• Is paid by you to present debt management options.
• They will look at the whole picture and present all financial options —including loans, home equity products, consumer proposals, bankruptcy, and beyond.
• They protect your information and answer your questions confidentially.
• If you do need to file for a consumer proposal or bankruptcy, a debt counsellor will prepare, structure, and propose the best solution for you to your trustee on your behalf.

If you decide to file for a consumer proposal or for bankruptcy, you will need to work with a trustee as they are the only professionals in Canada who can file for either one.

However, even if you do decide to go for one of those options, it is still to your benefit to consult a debt counsellor first, and during, the process.

A trustee is more like a referee — someone who is the middleman between you and your creditors. They are not necessarily on your creditors’ side, but they’re not on your side, either. They are obligated to follow the rules and report anything out of bounds that they discover.

As we mentioned above, a trustee is also paid based on the amount that you file in your bankruptcy or consumer proposal so often it is in their interest to try to make that amount higher so they are paid more.

A debt counsellor, on the other hand, is 100% in your corner. They will represent you and only you. You can count on them for confidential advice and to be your advocate when working with a trustee.

At DebtCare Canada, our debt counsellors offer free consultations to help decide the best debt management plan for you. We will examine every option available and if it comes to filing for a consumer proposal or for bankruptcy, we are on your side.

Contact us today. Call 1-888-890-0888 or visit www.debtcare.ca.