Caplan Debt Solutions

What a Licenced Insolvency Trustee Can Do for Your Financial Future

When faced with overwhelming debt, it can be difficult to know where to turn or who to trust. Credit card bills pile up, interest rates climb, and stress levels soar. In Canada, one of the most powerful allies in your fight against debt is a Licenced Insolvency Trustee (LIT). These professionals are legally authorized by the federal government to help individuals and businesses resolve financial problems and start over.

This article explains who LITs are, what they do, and why they are essential when navigating debt relief solutions like consumer proposals and bankruptcy. If you're exploring options to regain financial control, this is where your journey begins.

What Is a Licenced Insolvency Trustee?

A Licenced Insolvency Trustee is a debt professional licensed and regulated by Innovation, Science and Economic Development Canada. Their role is to help individuals and businesses solve serious debt issues through formal processes under the Bankruptcy and Insolvency Act (BIA).

Unlike credit counsellors or debt settlement agents, LITs are the only professionals legally authorized to:

Administer bankruptcies
File and negotiate consumer proposals
Provide court-recognized debt relief options
Offer protection from creditors

LITs are highly trained, ethical, and impartial. They work with both debtors and creditors to ensure fair, transparent outcomes while helping clients get back on track financially.

Services Offered by a Licenced Insolvency Trustee

Free Debt Consultations

Most LITs offer a free initial consultation to evaluate your financial situation. During this meeting, they review your income, debts, assets, and expenses to recommend the best path forward.

Consumer Proposals

A consumer proposal is a formal agreement with creditors to repay a portion of your debt over time — usually with no interest. LITs help craft and submit the proposal and negotiate with creditors on your behalf. Once accepted, it provides full legal protection from further collection action.

Bankruptcy Administration

When no other option is viable, filing for bankruptcy may be necessary. LITs guide you through the legal process, ensure you meet your obligations, and help eliminate most unsecured debts within 9 to 21 months, depending on your situation.

Debt Restructuring and Planning

Even if you don’t require a formal process like bankruptcy or a consumer proposal, LITs can help you explore options like budgeting, financial education, or connecting with credit counsellors.

Why Work With a Licenced Insolvency Trustee?

Hiring a LIT brings significant advantages when dealing with debt:

Legal Authority

LITs are the only professionals authorized to file bankruptcies and consumer proposals in Canada. No other person or organization has this legal status.

Creditor Protection

Once you work with a LIT, they initiate a stay of proceedings, which immediately stops collection calls, wage garnishments, lawsuits, and other creditor actions.

Fair and Impartial

LITs have a duty to act fairly — not just on your behalf but also to ensure creditors are treated equitably. Their role is transparent, structured, and guided by law.

Personalized Solutions

No two financial situations are the same. A good LIT will assess your unique circumstances and create a customized debt relief strategy that protects your assets and reduces your stress.

Comprehensive Support

From financial counselling to documentation, communication with creditors, and final discharge, a LIT supports you every step of the way.

Signs You Might Need a Licenced Insolvency Trustee

If you’re unsure whether it’s time to speak with an LIT, here are some warning signs:

You're living paycheck to paycheck with no savings
You’re relying on credit to cover basic expenses
Creditors are calling or threatening legal action
You’ve missed multiple payments on loans or credit cards
You’ve maxed out your credit and feel stuck
You're overwhelmed by financial stress and don't know what to do next

If any of these sound familiar, don’t wait — Contact us today to take the first step toward peace of mind.

Common Myths About Licenced Insolvency Trustees

Myth 1: LITs only recommend bankruptcy
Fact: LITs offer a full range of debt relief options and often suggest consumer proposals or alternative solutions when bankruptcy isn’t necessary.

Myth 2: Working with a LIT ruins your credit forever
Fact: While a consumer proposal or bankruptcy affects your credit short-term, it’s also a path to recovery. Many people rebuild their credit within 2-3 years.

Myth 3: You’ll lose everything in bankruptcy
Fact: In Canada, many assets are exempt from seizure, including basic household items, RRSPs (except recent contributions), and a vehicle up to a certain value.

Choosing the Right Licenced Insolvency Trustee

Finding a trustworthy LIT is key to a smooth debt relief journey. When choosing a trustee:

Look for experience and a strong local reputation
Ask if they specialize in consumer proposals, bankruptcy, or both
Confirm they offer free consultations
Read reviews or testimonials from past clients
Make sure they take time to explain your rights and options clearly

At Caplan Debt Solutions in Winnipeg, we pride ourselves on offering compassionate, confidential guidance tailored to your needs. We understand how overwhelming debt can be, and we’re here to help you move forward with clarity and confidence.

Next Steps

If you're struggling with unmanageable debt, a Licenced Insolvency Trustee can help you regain control and build a brighter financial future. Whether through a consumer proposal, bankruptcy, or another strategy, they’ll guide you with care and expertise.

👉 Visit Our Website to book your free consultation and learn how Caplan Debt Solutions can support you on your path to debt freedom.

Conclusion

A Licenced Insolvency Trustee is more than just a debt professional — they are your ally in overcoming financial hardship. From offering legal protection to crafting debt repayment plans and guiding you through bankruptcy, their services are essential for anyone facing serious financial strain.

Don’t wait until the stress becomes too much. If you’re ready to explore your debt relief options, reach out to a trusted LIT near you and Find your solution today.