In this guide
What is a Licensed Insolvency Trustee?
A Licensed Insolvency Trustee (often referred to as a trustee or LIT) is a debt professional licensed by the Government of Canada to administer consumer proposals and bankruptcies under the Bankruptcy and Insolvency Act.
They can help you resolve your debt problems, whether it’s credit card debt, defaulted loans, overdue CRA taxes, student debt or something else.
A trustee is responsible for administering bankruptcies and consumer proposals, protecting the rights of both you and your creditors, and giving you straight advice on how to deal with what you owe.
Only a licensed trustee can file for bankruptcy and consumer proposals, providing creditor protection that stops wage garnishments and legal action.
Source: Government of Canada – Office of the Superintendent of Bankruptcy
Not only that, but only a trustee can offer creditor protection that can halt wage garnishments and legal action against you.
We recommend consulting a LIT when seeking debt help, as they are federally regulated professionals licensed by the Office of the Superintendent of Bankruptcy (OSB), making them the most qualified debt professionals you can turn to.
What does a Licensed Insolvency Trustee do?
Licensed Insolvency Trustees have the knowledge, experience and expertise to solve your debt issues and recommend solutions based on your financial situation. Through a trustee, you can freeze interest on your debts, stop collection action, stop wage garnishments and even reduce your debt under certain circumstances.
It starts with a free consultation. The trustee reviews your income, expenses, and debts, answers your questions, and lays out all of your options. That can mean credit counselling, a debt consolidation loan, a consumer proposal, bankruptcy, or advice on protecting assets and budgeting.
A trustee will never pressure you into any particular solution. Instead, they will offer impartial advice based on your circumstances, allowing you to make a decision based on that advice.
If you decide to file a consumer proposal or bankruptcy, the trustee prepares the forms, files them with the government, and guides you through to discharge.
How is a Licensed Insolvency Trustee regulated?
All Licensed Insolvency Trustees are licensed and regulated by the Office of the Superintendent of Bankruptcy (OSB) and must adhere to standards of practice, including a code of ethics. More than 90% are members of the Canadian Association of Insolvency and Restructuring Professionals (CAIRP).
Source: Government of Canada – Code of Ethics for Trustees; CAIRP – Protecting the Public Interest
A trustee must have extensive knowledge and experience in insolvency law before obtaining a license.
They have to comply with the legislation and directives set by the OSB, undergo regular reviews, audits, and inspections, and adhere to standards of practice and rules. If someone makes a valid complaint, a trustee can be investigated and disciplined.
A trustee must be of good character, be solvent, and complete the following:
- The Chartered Insolvency and Restructuring Professional Qualification Program.
- The CIRP National Insolvency Exam.
- The Insolvency Counsellor’s Qualification Course or the Practical Course on Insolvency Counselling.
Trustees must also pass an Oral Board of Examination.
Source: Government of Canada – How to become a Licensed Insolvency Trustee
Why is it called a Licensed Insolvency Trustee?
A Licensed Insolvency Trustee (LIT) was formerly called a “Bankruptcy Trustee,” “Trustee in Bankruptcy,” or “Licensed Bankruptcy Trustee.”
The name changed in 2016 to reflect their broader role beyond bankruptcy, including consumer proposals, which now account for the majority of insolvency filings in Canada.
In 2025, 78.4% of consumer insolvencies were proposals, not bankruptcies, so “bankruptcy trustee” no longer described most of the work.
How do you appoint a Licensed Insolvency Trustee?
It’s simple. You book a free, confidential consultation with a trustee firm, and go through your finances together so the trustee can explain your options and the consequences of each.
From there, you can take the advice and handle things yourself, or ask the trustee to file a consumer proposal or a bankruptcy. If you decide to file, the trustee will submit your documents to the government and become your official Licensed Insolvency Trustee.
You never pay to speak to a trustee, and you never pay a middleman to reach one. The first consultation is free.
Be aware that some debt settlement companies and debt consultants try to charge large upfront fees just to refer you to a trustee. You don’t need to do this, and only a trustee can legally file for bankruptcy or a proposal.
You can find a legitimate trustee on the OSB’s public registry. For example, you can verify Moses Advisory Group here. Our Licensed Insolvency Trustees serve clients throughout Alberta, Ontario, British Columbia, Nunavut and the Northwest Territories.
How much does a Licensed Insolvency Trustee cost?
If you file a consumer proposal, a Licensed Insolvency Trustee’s fees are paid from your payments at no additional cost to you.
In bankruptcy, the cost depends on your income, and the payment structure can vary. The federal government regulates the fees trustees charge.
You make your payments directly to your trustee, with the fees collected from these payments before distribution to creditors.
Find the right solution for your debt
Get free, honest debt advice from a Licensed Insolvency Trustee by video, phone or in person.
- Eliminate up to 80% of debt
- One monthly payment
- Stop collection calls
- Stop wage garnishments
- Freeze interest
or call 1-587-701-5681
* Up to 80% reduction depending on your situation.
Frequently asked questions
What’s the difference between a trustee and a debt consultant?
A Licensed Insolvency Trustee can file a consumer proposal or bankruptcy on your behalf. In contrast, a debt consultant cannot file either and charges upfront fees just to refer you to a trustee.
Is a Licensed Insolvency Trustee the same as a bankruptcy trustee?
Yes. “Bankruptcy trustee” and “trustee in bankruptcy” are the old names. The title changed to Licensed Insolvency Trustee in 2016 to reflect the broader role, which now includes consumer proposals.
How much does it cost to talk to a Licensed Insolvency Trustee?
Nothing. The first consultation with a Licensed Insolvency Trustee is free, and there’s no obligation. You only pay once you file, and in the case of a consumer proposal, fees are deducted from your payments.
Can a Licensed Insolvency Trustee stop collection calls and garnishments?
Yes. When you file a consumer proposal or bankruptcy through a Licensed Insolvency Trustee, a stay of proceedings takes effect that stops collection calls, wage garnishments and lawsuits.
Do I have to file bankruptcy if I see a trustee?
No. A Licensed Insolvency Trustee reviews all your options and files nothing unless you decide to go ahead. Many people leave a consultation with a plan that isn’t bankruptcy at all. There are many debt relief options available. Consumer proposals and bankruptcy are suitable for everyone.
How do I check a trustee is legitimate?
All Licensed Insolvency Trustees are listed on the OSB’s public registry of Licensed Insolvency Trustees.
Talk to a Licensed Insolvency Trustee
A Licensed Insolvency Trustee can review your debts, explain every option, and tell you which one fits, with no pressure and no upfront fee. The first consultation is free, by video, phone or in person.