The 3 Best Licensed Insolvency Trustees in Markham [2024]

A Licensed Insolvency Trustee (LIT) is a person licensed by the Superintendent of Bankruptcy in Canada. They are professionals who provide advice and services to individuals and businesses facing financial troubles. They administer bankruptcy and insolvency proceedings and can negotiate with creditors on behalf of the debtor.

LITs generally make money through fees derived from the administration of consumer proposals and bankruptcies. These fees are regulated by the Canadian government and can include a base amount plus additional costs for certain disbursements tied to administering the insolvency estate.

In most cases, the cost of a bankruptcy or consumer proposal is paid out of the assets or income of the debtor’s estate or sometimes by the debtor in installments. In other words, your payments go to your Licensed Insolvency Trustee, who then distributes this money proportionately among your creditors.

The cost of insolvency can vary greatly depending on the complexity of the financial situation and the type of proceeding (i.e., bankruptcy or consumer proposal). There are statutory tariff fees for trustees’ services in administering bankruptcies and proposals, which are governed by federal law. However, additional costs may arise for asset dispositions, legal fees, court costs, and other related expenses. It is best to discuss fees upfront with your trustee to get a clear understanding of potential costs.