25 Important Questions to Ask a Licensed Insolvency Trustee
Are you considering consulting with a Licensed Insolvency Trustee (LIT) to help with your debt relief needs? If so, we’re sure you have a list of questions about the process. Below are 25 questions we think you may want to add to that list.
Since each person’s financial situation is different, we’re not going to be answering these questions in detail. However, we can do so once we learn more about your specific situation. In the meantime, let’s check out some questions you should ask prospective LITs and why.
Questions to Ask Your Licensed Insolvency Trustee Before Your First Consultation
First, let’s start with some questions you’ll want to ask while shopping around for a Licensed Insolvency Trustee. These will most likely be asked over the phone before you schedule your first consultation.
#1 Can you Send me a Link to Reviews from Previous Clients?
The best way to see if a Licensed Insolvency Trustee has happy clients is to check out their online reviews. While shopping around, try to choose a LIT with very few poor reviews. This will save you many headaches down the line.
#2 Are You Familiar With The Laws In My Province?
Insolvency laws vary from province to province. Only pick a Licensed Insolvency Trustee familiar with your province’s laws and regulations. In fact, Licensed Insolvency Trustees can only conduct business in the provinces they are licensed in. Generally, regional firms, such as Powell Associates Ltd. are licensed in several provinces.
#3 What is the Cost of my Initial Consultation?
You don’t want to get blind-sided during your first consultation with a hefty bill at the end. Find out the cost before you schedule. At Powell Associates Ltd., our initial consultations are always free of charge.
#4 How Much Time Should I Set Aside for My Consultation?
Depending on your situation, your LIT will set aside a specific amount of time for your initial consult. Make sure you know how long that will be so you can fit it into your busy schedule.
#5 What Information Should I Bring?
Your LIT is going to want to see all of your financials. This includes all of the secured and unsecured debt you owe and information on your assets, dependents, and employment situation. They may also have other requirements you’ll want to know about before you show up.
#6 Do You Have The Necessary Experience for My Situation?
If you’re shopping around for a Licensed Insolvency Trustee, you’re going to want one who understands your situation. If you run a large business, for example, you will want a Trustee who has the experience and resources to handle your file.
#7 Are You Licensed By The Federal Government?
All Licensed Insolvency Trustees are licensed by the federal government. You may, inadvertently, contact a debt consultant while shopping around for a LIT. They are not licensed and are unable to initiate insolvency proceedings.
Questions to Ask Your Licensed Insolvency Trustee During Your First Consultation
During your first consultation, you will be going over all of your options with your Licensed Insolvency Trustee. Here are some questions we think you should get the answers to before you make a final decision on how to proceed.
#8 What is the Best Debt Relief Option for My Situation?
Everyone’s financial situation is different. For some, debt consolidation may be the best option. For others, a consumer proposal or bankruptcy may be best. Your Licensed Insolvency Trustee should be able to outline the available options for you to consider.
#9 What are the Advantages and Disadvantages of this Option?
Once you’ve decided on your best option, you will need the pros and cons of going that route. Some debt relief options carry more serious ramifications than others. Finding this out during your initial consultation will help you make an informed decision.
#10 Which Debts will this Affect?
While the legislated options such as the consumer proposal or personal bankruptcy affect all unsecured debt, other options may not necessarily assist with everything. It is important to understand what option will be most suitable to your debt load and financial circumstances.
#11 How Much Will This Cost Me?
You don’t want to be surprised by fees or costs. Find out exactly how much your debt relief option is going to cost, initially, monthly, and down the road. In most cases, you’re going to be surprised at how affordable insolvency proceedings compared to continuing with your status quo.
#12 How Will This Affect My Spouse?
If only one person in a marriage is experiencing financial difficulties, they’ll want to know how their debt relief options are going to affect their partner. This could be in reference to joint bank accounts, shared assets, or credit ratings.
#13 How Will This Affect My Employment?
In most cases, debt relief options aren’t going to affect your current job or future prospects. There are some instances, though, where they could. Make sure to get all of this information upfront before deciding which option to choose.
#14 How Will This Affect My Credit Rating?
If home ownership or a large purchase is on the horizon, you will want to know how this decision will affect your credit rating. In most instances, it isn’t going to be good. Find out the specifics before committing to a decision.
#15 How Will This Affect My Assets?
The debt relief option you chose could have profound implications on your assets. If you choose a consumer proposal, your assets are safe as the payments are built around your assets. If you decide that bankruptcy is the best choice for your needs, you’ll have to consider how that will affect the assets you own.
#16 Who Will I Be Dealing With At Your Firm?
Get all of the contact information for whoever will be the point person during your proceedings. Most firms have different departments that handle bankruptcies and proposals. Make sure you know who to contact for whatever questions you may have.
#17 How and When Will You Communicate With Me Throughout The Process?
The last thing you need during this stressful time is to be left hanging without any updates. Make sure your trustee has all of your up-to-date contact info and know when you will receive information regarding the process.
#18 What Are My Ongoing Requirements?
Some debt relief options will require either monthly reporting, ongoing financial counselling, or new asset disclosure. Make sure these requirements don’t take you by surprise after you’ve already committed to a decision.
#19 What Assistance Will You Provide To Help Me Get Back On Track?
A Licensed Insolvency Trustee shouldn’t just be someone who files paperwork on your behalf and then moves on. You should feel comfortable with the trustee you choose to help you understand your options and be available when you have questions along the way.
#20 How Long Will I Be Bound by My Debt Relief Option?
Depending on which debt relief option you and your Licensed Insolvency Trustee choose, it could be as short as 9 months or as long as 60 months before your insolvency issues are all cleared up.
Questions to Ask Your Licensed Insolvency Trustee After Your First Consultation
Again, your LIT will stick with you throughout the entire time it takes to have your insolvency proceeding discharged. You may have the following questions for them once they’ve filed your insolvency paperwork.
#21 What Steps Should I Take To Rebuild My Credit?
Getting rid of all of your old unsecured debt is just the first step toward financial freedom. While you’re paying off these debts, you’ll also want to build up your credit score. Your LIT will be able to help you with a budget and other tips to get your credit rating back where it needs to be.
#22 How Soon Can I Apply For A Loan?
While you’re in the process of paying off your debts, it’s unlikely any institution is going to offer you an unsecured loan. You may end up needing a secured loan, though, against a house or car. Your LIT can help you decide when and if this is a good idea.
#23 How Will A New Job Affect My Payments?
If you’re offered a new, higher-paying job, that may affect the payments you’re making on your bankruptcy. Before accepting any new job during your insolvency proceeding, consult with your LIT to see how that will affect your payments so you can make an informed decision.
#24 Can I Pay This Off Sooner?
If you happen to come into a lump sum of money, you may want to use that to shorten the duration of your consumer proposal. Check with your Licensed Insolvency Trustee to see if this is an option and what the ramifications might be.
#25 How Do I Ensure This Doesn’t Happen Again?
Once your insolvency proceeding is discharged, you’re going to want to make sure you don’t have to go through that again. Your Licensed Insolvency Trustee can help you with budgeting and financial advice to ensure you don’t have to worry about being insolvent again.
Have More Questions for a Licensed Insolvency Trustee? Contact Us.
If you have additional questions for us, or if you’d like to set up a free initial consultation, please feel free to contact us. We’ve helped hundreds of Canadians in the Maritime Provinces with their debt relief needs. We can do the same for you.