What is a Licensed Insolvency Trustee?
A Licensed Insolvency Trustee is the only professional in Canada legally authorised to administer consumer proposals and bankruptcies. This page explains what that means, how the role is regulated, and why it matters when you are looking for help with debt.
A Licensed Insolvency Trustee is a federally licensed professional regulated by the Office of the Superintendent of Bankruptcy Canada. LITs are the only professionals in Canada legally authorised to administer consumer proposals and bankruptcies under the Bankruptcy and Insolvency Act. They are licensed by the federal government, regulated by professional standards, and legally obligated to act in the interest of both debtors and creditors.
The name changed in 2016
Before 2016, the role was known as a “Trustee in Bankruptcy.” The name was changed to “Licensed Insolvency Trustee” to better reflect the full scope of the profession, which covers consumer proposals and other insolvency matters, not only bankruptcy. If you see references to “bankruptcy trustees,” they are the same professionals under a different name.
The term “Licensed Insolvency Trustee” is specifically defined and protected under the Bankruptcy and Insolvency Act. No other professional may use this title without a federal licence. This matters because the Canadian debt help industry includes many types of companies, some of which use confusingly similar terms, such as “debt consultant,” “insolvency advisor,” or “credit counsellor.” None of these titles carry the legal authority of a Licensed Insolvency Trustee.
When you work with a Licensed Insolvency Trustee, you are working with someone who is required by federal law to review your full financial picture, explain all available options, and administer any formal process under strict regulatory oversight.
What a Licensed Insolvency Trustee is authorised to do.
The scope of an LIT’s authority is defined by the Bankruptcy and Insolvency Act. The following are reserved exclusively for Licensed Insolvency Trustees. No other professional may legally perform these services.
File consumer proposals
Only an LIT can prepare, file, and administer a consumer proposal under Division II of the BIA. No other professional has this legal authority.
Administer personal bankruptcies
Only an LIT can accept an assignment in bankruptcy, administer the estate, and apply for a debtor’s discharge under the BIA.
Provide mandatory credit counselling
The two mandatory credit counselling sessions required during every consumer proposal and bankruptcy must be administered by or under the supervision of a Licensed Insolvency Trustee.
Administer business insolvency
Corporate proposals, receiverships, and business bankruptcies under the BIA and the Companies’ Creditors Arrangement Act are also within the authority of a Licensed Insolvency Trustee.
Represent all parties fairly
An LIT has a dual role: to act in the interests of creditors (by administering the estate) and to inform and guide debtors through the process. This dual obligation is enshrined in the BIA and enforced by the OSB.
Assess all options objectively
Before any formal process begins, an LIT is required to explain all available options. They cannot recommend a particular process without reviewing the full financial picture and disclosing alternatives.
How Licensed Insolvency Trustees are regulated.
LITs operate under one of the most rigorous regulatory frameworks of any financial professional in Canada. Here is what that framework involves.
Education and examination
Candidates must complete a rigorous educational program through the Canadian Association of Insolvency and Restructuring Professionals (CAIRP) and pass comprehensive national examinations before they can be licensed.
Federal licensing
The licence is issued by the Office of the Superintendent of Bankruptcy Canada (OSB), a federal agency. The OSB can suspend or revoke an LIT’s licence for professional misconduct or regulatory violations.
Ongoing continuing education
LITs must complete annual continuing professional development to maintain their licence. The profession is required to stay current with changes to insolvency law, tax law, and related regulatory requirements.
File-by-file oversight
Every insolvency file administered by an LIT is subject to review by the OSB. Court oversight applies to contested matters. This level of accountability does not exist for any unregulated debt help service.
Regulated fees
Consumer proposals and Summary administration files are subject to a tariff set by the government. Division 1 proposals and Ordinary administration bankruptcy files are based on time spent on the administration of the insolvency process, and are charged to the estate at an hourly rate. In every case, fees must be disclosed in advance.
How LIT fees work in practice.
One of the most common concerns people have when calling a Licensed Insolvency Trustee is the cost. Here is what the regulatory framework means for you in plain terms.
For a consumer proposal, there are no upfront fees. Your trustee’s compensation is built into the monthly payments you make under the proposal, drawn from the funds distributed to creditors.
For a bankruptcy, the trustee receives a percentage of the assets realised in the estate, plus a fee for administering the process. In a no-asset bankruptcy (where there is nothing to distribute), the fees are covered by the filing itself and any surplus income payments made during the bankruptcy period.
On tariff files — consumer proposals and Summary administration bankruptcies — the government tariff sets exactly what an LIT can charge, and charging more than the tariff is a reportable violation. On Division 1 proposals and Ordinary administration files, fees are based on time actually spent, charged to the estate at an hourly rate, and remain subject to OSB and court review. Either way, the basis for the fees is explained to you before anything begins, and you will not be presented with a surprise invoice at the end of the process.
The free initial consultation involves no fee whatsoever. You are under no obligation after speaking with a trustee, and there is no charge for any advice given during that conversation.
LIT vs. non-profit credit counsellor vs. debt settlement company.
These three types of help are often confused because some companies deliberately use similar-sounding names. The differences in legal authority, accountability, and outcomes are significant.
Licensed Insolvency Trustee
Non-profit Credit Counsellor
Debt Settlement Company
Federally licensed
Licensed Insolvency TrusteeYesLicenced by OSB Canada under the BIA.
Non-profit Credit CounsellorNoProvincially registered. Varies by province.
Debt Settlement CompanyNoNo federal or consistent provincial licensing.
Can file consumer proposals
Licensed Insolvency TrusteeYesExclusively. No other professional has this authority.
Non-profit Credit CounsellorNo
Debt Settlement CompanyNo
Can administer bankruptcy
Licensed Insolvency TrusteeYesExclusively. No other professional has this authority.
Non-profit Credit CounsellorNo
Debt Settlement CompanyNo
Legal protection from creditors
Licensed Insolvency TrusteeYes, immediatelyStay of Proceedings takes effect on the day of filing.
Non-profit Credit CounsellorNo legal protectionCreditors are not legally required to participate.
Debt Settlement CompanyNo legal protectionCollection activity continues during “negotiation.”
Can include CRA tax debt
Licensed Insolvency TrusteeYes, in most cases
Non-profit Credit CounsellorNoCRA does not participate in debt management plans.
Debt Settlement CompanyNo
Fees regulated by law
Licensed Insolvency TrusteeYesSet by the BIA, by government tariff or by reviewable hourly rate. No upfront fees for proposals.
Non-profit Credit CounsellorPartiallyNon-profit agencies have lower fees; vary by province.
Debt Settlement CompanyNoOften charge high upfront or ongoing fees regardless of outcome.
Legally obligated to disclose all options
Licensed Insolvency TrusteeYesRequired to assess and present all available options before any process begins.
Non-profit Credit CounsellorPartiallyGood non-profit counsellors will refer to a LIT when appropriate.
Debt Settlement CompanyNoCommercial interest in their own service.
Outcome binding on all creditors
Licensed Insolvency TrusteeYesOnce a consumer proposal is accepted, it binds all unsecured creditors, including those who voted against it.
Non-profit Credit CounsellorNoEach creditor must agree individually.
Debt Settlement CompanyNoSettlements are voluntary and creditor-by-creditor.
Oversight and accountability
Licensed Insolvency TrusteeFull federal oversightOSB supervises every file. Court oversight available. Licence can be revoked.
Non-profit Credit CounsellorProvincial / associationQuality varies. Non-profits generally more accountable than for-profit.
Debt Settlement CompanyMinimalSubject to provincial consumer protection laws only.
How to confirm that a trustee is licensed.
The Office of the Superintendent of Bankruptcy maintains a public database of all Licensed Insolvency Trustees in Canada. Anyone can search it for free. Before engaging any insolvency professional, confirm their licence is current and active.
Visit the Insolvency Names Search on the OSB website at ic.gc.ca
Search by the name of the firm or the individual trustee.
Confirm their licence status shows as “Active” and that their licence type includes the services you need (consumer proposal, bankruptcy, or both).
If a company cannot be found in the database, they are not a Licensed Insolvency Trustee and cannot legally file a consumer proposal or bankruptcy on your behalf.
Your first meeting with a Licensed Insolvency Trustee.
The first consultation is free, confidential, and carries no obligation to proceed. Most people are surprised by how straightforward and low-pressure the conversation is. Here is what to bring and what to expect.
- A list of your debts and who you owe them to, with approximate amounts
- A general sense of your monthly income and expenses (pay stubs or recent bank statements if available)
- A list of assets you own: home, vehicle, savings, investments
- Any recent collection letters, garnishment notices, or court documents
- Your most recent income tax notice of assessment, if you have CRA debt
- The trustee listens to your situation without judgement. There are no right or wrong answers.
- You are asked questions about your debts, income, monthly expenses, assets, and goals to understand the full picture.
- The trustee explains every option available to you, including options that do not involve a formal insolvency process.
- You receive a plain-language assessment of what each path would look like for your specific situation.
- You are under no obligation to proceed with anything. The meeting is informational.
- If you have questions about confidentiality, what happens next, or anything else, this is the time to ask.
You do not need to have all the information ready. Most people come to their first meeting with a rough sense of their debts, income and expenses but not precise figures. That is completely normal. Your trustee will help you organise the information needed and can request documents afterward if necessary. The most important step is making the call.
Day Group Inc. is a Licensed Insolvency Trustee firm serving the prairie provinces.
Day Group Inc. is a Licensed Insolvency Trustee firm serving Alberta, Saskatchewan, and Manitoba. We are licenced by the Office of the Superintendent of Bankruptcy Canada to administer consumer proposals, personal bankruptcies, and related insolvency matters across the prairie provinces.
We are not a debt settlement company. We are not a credit counselling agency. We are federally licensed professionals with a legal obligation to act in your interest and to explain every option available to you, without pressure and without an agenda.
Our approach is plain-language and unhurried. Most people who call us have spent weeks or months worrying about their debt before picking up the phone. The first conversation is free, confidential, and designed to give you clarity, not a sales pitch.
- Federal LIT licence issued by the Office of the Superintendent of Bankruptcy Canada
- LIT licence number: 4172
- Authorised to administer consumer proposals and bankruptcies under the Bankruptcy and Insolvency Act
- Serving Alberta, Saskatchewan, and Manitoba
- Consultations available in person, by phone, and virtually
- First consultation free with no obligation to proceed
Frequently asked questions about Licensed Insolvency Trustees.
Plain answers to the questions we hear most often about LITs, their qualifications, and what working with one involves.
Is a Licensed Insolvency Trustee the same as a bankruptcy trustee?
Yes. The title “Trustee in Bankruptcy” was changed to “Licensed Insolvency Trustee” in 2016. The change reflected the fact that the profession covers far more than bankruptcy, including consumer proposals and other forms of insolvency work. The role, legal authority, and regulatory framework are the same.
If you see a firm or individual described as a “bankruptcy trustee,” they are a Licensed Insolvency Trustee using an older version of the title. You can confirm their current licence on the OSB insolvency database.
Can a Licensed Insolvency Trustee help me even if I do not end up filing for bankruptcy?
Yes, and this is one of the most important things to understand about the role. An LIT is required by law to review your full financial picture and explain all available options before any formal process begins. That includes informal options such as negotiating directly with creditors, debt consolidation, or a debt management plan through a credit counselling agency.
If bankruptcy or a consumer proposal is not the right fit for your situation, a trustee will tell you that and explain what alternatives may work better. Many people who come for a free consultation leave with a clearer picture of all their options, not just the formal insolvency ones.
How do I know if the person I am talking to is actually a Licensed Insolvency Trustee?
Ask them directly for their LIT licence number, then confirm it in the Office of the Superintendent of Bankruptcy’s Insolvency Names Search database at ic.gc.ca. The database is publicly searchable and shows the current licence status of every LIT in Canada.
Be cautious of companies that use terms like “insolvency advisor,” “debt relief specialist,” “credit counsellor,” or “financial recovery consultant.” None of these are protected titles. Only “Licensed Insolvency Trustee” carries the legal authority to file consumer proposals and bankruptcies.
Is a Licensed Insolvency Trustee on my side, or the creditors’ side?
Both, in different respects, which is what makes the role impartial. A trustee has a legal obligation to administer the process fairly on behalf of creditors (who are entitled to a fair distribution of what is available) while also being required to fully inform and guide the person filing (who is entitled to understand all their options and their rights).
In practice, for someone facing financial difficulty, the most important thing to know is that a trustee is legally required to explain all your options, cannot steer you toward a particular process without a proper assessment, and cannot charge outside the fee framework set under the BIA, whether that is the government tariff or an hourly rate reviewable by the OSB and the court. Those protections do not exist with unregulated debt help services.
How much does it cost to meet with a Licensed Insolvency Trustee?
The initial consultation is free. Day Group Inc. charges nothing for the first meeting, and there is no obligation to proceed with anything after the consultation.
If you do proceed with a consumer proposal or bankruptcy, the fees are governed by federal law and are built into the process. There are no upfront charges for a consumer proposal. Your trustee will explain all fees before any process begins.
What areas of Canada does Day Group Inc. serve?
Day Group Inc. serves Alberta, Saskatchewan, and Manitoba. Consultations are available in person, by phone, and virtually, which means we can assist clients throughout the prairie provinces regardless of location. If you are unsure whether we can assist in your area, call us and we will confirm.
Today is the day.
The first conversation costs nothing. A Licensed Insolvency Trustee will review your situation honestly and tell you every option that is available to you, in plain language.