Bankruptcy in Canada – Does Your Trustee Represent You?
If you are drowning in debt and considering a bankruptcy in Canada or a consumer proposal as a solution for debt relief, you may be thinking that the best approach is to go directly to a trustee. Many trustees advertise that they have a solution to your debt problem, and that is true, but are they acting as your representative? Therein lies the problem.
Both a bankruptcy in Canada and a consumer proposal must be administered by a trustee – you can’t conduct or negotiate a bankruptcy on your own. Therefore, it is a common misconception that you should just go right to the trustee to get things started. We urge you to reconsider this path.
Why? A trustee is a court appointed officer whose job is to act in your interest AND the interest of your creditors. That means that, although they do represent you, they also represent your creditors. You are not their priority – they are required to find an equitable solution that best suits all involved.
Additionally, because you look at the trustee as your representative, you may share or present things to the trustee that will later be used against you or you may omit important information that will impact you later.
For example, in a bankruptcy your monthly payment and the length of time you pay depend on an income calculation. If you err when providing information to the trustee, and the trustee later becomes aware of additional information, even after you have filed, the trustee can claim that you owe your creditors ‘surplus income’ and you will have to pay this money to the trustee before you can be discharged. This may also extend the amount of time you have to remain in the bankruptcy.
This can get even more complicated when it comes to a consumer proposal. This is because, in a consumer proposal, the trustee is paid a percentage of the amount of the proposal. The more money your trustee can get for your creditors, the more money they receive. This scenario clearly does not place your best interests at the forefront.
When you have a financial challenge, a bankruptcy or consumer proposal may be the solution – however, you are best served by speaking with a financial consultant who represents you before visiting a trustee. When you meet with a financial consultant who specializes in bankruptcy, that individual can help you structure your information to disclose what is relevant and can even propose the terms of your filing to the trustee. This is the best way to protect yourself.
At DebtCare, we can help you get all of your information sorted before you speak with a trustee, protecting your interests the entire time.
Give us a call today at 1-888-890-0888.