A Licensed Insolvency Trustee (LIT) is a licensed professional who can help you if your small business has debt problems. An LIT can advise you on potential legal proceedings as well as make suggestions to try to avoid insolvency or bankruptcy with regards to your creditors and investors.
How a Licensed Insolvency Trustee Works
An LIT can help you, as a small business owner with financial difficulties, make a plan to pay off debts. One type of plan is a consumer proposal, and it allows you to request a debt reduction from your creditors. This proposal occurs when you work with your creditors to make payment arrangements agreeable to all parties. You may end up paying a lower monthly payment, have a longer period of time to pay your loans, or both. You make payments through the LIT so the professional can monitor the situation. A legally binding consumer proposal helps both parties because your business potentially avoids bankruptcy and your creditors recoup at least some of your debt payments, even if it is less than you initially owed.
An LIT also helps your company file for bankruptcy if you have to go through with that option. A bankruptcy discharges your business debts, and creditors can liquidate your business assets as a way to regain some or all of their investment.
How to Find a Licensed Insolvency Trustee
The Office of the Superintendent of Bankruptcy grants licences to all LITs to ensure all Licensed Insolvency Trustees are qualified to offer financial services and advice that adhere to Canadian law. Find an LIT through the Licensed Insolvency Trustee registry. If you’re a small business owner who needs debt advice, look for an LIT in your area using the handy online registry. The registry lets you search by name, whether the LIT is an individual or a firm, and the city and province where the LIT does business.
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