Bankruptcy is often perceived as scary – a last resort option for those that are in dire financial straits. The truth, however, is far less terrifying. Average Canadians are turning to bankruptcy as a viable debt relief solution far more often, and for good reason: it can stop collection action and stop penalties and interest. The scary part though is not knowing who to turn to, and thinking that a Canadian trustee in bankruptcy is your only option.

A Canadian trustee in bankruptcy is appointed by the Superintendent of Bankruptcy and is regulated by the government. They are a court officer and appear in court. They administer the Bankruptcy Act.

However, when it comes to representation, they are not like a lawyer or accountant who represents you. A trustee represents your estate, so essentially, your money – but once you file for bankruptcy, that money is no longer yours, it becomes the estate itself.

During the bankruptcy process, a trustee will attempt to administer the estate, acting for both you and your creditors. That being said, they have as much of an obligation to make a fair deal for your creditors as they do for you.

Some additional catches:

• In the case of consumer proposals, the more a trustee negotiates for your creditors, the more they earn – so it is in their best interests to negotiate a higher amount.
• There is no confidentiality – if you tell them something that relates to your filing, it is the same as telling your creditors and could result in financial consequences.
• If you earn more money or come into money – they will be the first ones to have their hands on it to the benefit of your creditors.

Again, consumer proposals and bankruptcies may seem scary – we may not seem to be helping so far, but in reality they are great solutions – dealing with trustees is what can become problematic.

What can you do to protect yourself and your assets with either of these scenarios? Be represented – choose a representative who knows bankruptcy and have an open and transparent conversation with them. Let them structure your bankruptcy or proposal, negotiate with the trustee on your behalf and manage the process for you – since they actually represent you, the only person they are concerned about is you! You’ll end up with less stress and the best deal in the circumstances.

If you are considering filing for bankruptcy or filing a consumer proposal, don’t deal directly with a Canadian trustee in bankruptcy. Call DebtCare instead. We represent you. 1-888-890-0888.