Code of Ethics for Licensed Insolvency Trustees
Your financial situation is personal. Talking to anyone about it, especially a stranger, can bring up anxiety, embarrassment, fear, and worry. This is normal. Personal finances are an incredibly important aspect of life, and making the right financial decisions is crucial.
You want to talk to someone who is knowledgeable in their field and who you can rely on to give you all the options without any bias. Nowadays, it is hard to know who to trust. If you have been struggling to keep up with your debt obligations and you can’t seem to get yourself out, it is a good idea to consult with a professional who adheres to a code of ethics such as a Licensed Insolvency Trustee.
What is a Licensed Insolvency Trustee?
A Licensed Insolvency Trustee (or LIT) is a great professional to turn to for advice and services relating to debt. Unlike what many people think, LITs deal with much more than just Bankruptcies. They can help you file a Consumer Proposal, as well as help you make a budget and manage your credit, and provide you with legal protection from creditors.
LITs adhere to the Code of Ethics, which goes over the standards that a Trustee must comply with in order to do their jobs to the best of their ability. If you’re feeling nervous about consulting a Trustee, here are some assurances that they are someone you can feel confident about talking to.
How Do You Become a Licensed Insolvency Trustee?
Becoming a Licensed Insolvency Trustee involves a lot of training in the form of qualification programs, courses, and examinations.
First, a program called the Chartered Insolvency and Restructuring Professional Qualification Program (CIRP Qualification Program or CQP) must be completed. To be admitted into the program, the candidate must have either a professional designation in accounting or auditing, or have an undergraduate degree from a recognized post-secondary institution. This program takes a minimum of two years to complete and can take longer depending on the candidate.
Once the CQP is completed, the candidate must apply for and pass an oral examination administered by the Office of the Superintendent of Bankruptcy (OSB). If all these prerequisites are met, the candidate can apply for a trustee license through the OSB.
With this much training, you can be assured that Trustees have enough knowledge and experience to expertly guide you through your financial journey.
The Code of Ethics for Licensed Insolvency Trustees
The Code of Ethics for Trustees in Bankruptcy is a part of the Bankruptcy and Insolvency General Rules that outlines the ways in which Trustees must do their jobs. Some key components of the code include:
- Impartial cooperation with all parties,
- Honestly and integrity,
- Conflicts of interest,
- Proper property and asset management, and
- Employee conduct.
The code ensures that debtors are getting the financial help they deserve in an honest way. Since it is found within the Bankruptcy and Insolvency Act (BIA), which is federal legislation, the Code is upheld through ongoing oversight by the Canadian government with reviews, audits, inspections, and relevant discipline.
This oversight is administered by the Office of the Superintendent of Bankruptcy, who makes sure that all insolvencies in Canada are supervised and administered properly in line with the Code and the entire BIA. Their motto is to protect the integrity of the insolvency system in Canada.
Why is a Code of Ethics Important?
The Code of Ethics for Licensed Insolvency Trustees is used to ensure that everyone who seeks financial help from a Trustee is given all the legal tools available to help them. The Code ensures a national standard of service and works to eliminate all inequality and poor advising, and administers consequences when needed.
Trustees are required by Rule 39 of the code to discuss all potential options with each one’s consequences in full, to ensure that you make the best decision possible for yourself. They cannot force you to choose any specific path, they will simply give guided and sound advice based on a thorough assessment of your situation, coming from years of experience and training in insolvency.
As well, an LIT cannot advise you to do anything that they know, or should know, is dishonest or against the law and the Bankruptcy and Insolvency Act. That means you can rest a little easier knowing that the advice you are getting is reliable.
A common misconception about LITs is that they work for the creditors. This is not the case. The Trustee’s job is to represent every parties’ interests and ensure fairness. These parties include the debtor or bankrupt, the creditors, the Office of the Superintendent of Bankruptcy, other parties (if applicable), and the court (if applicable). By the Code, a Trustee is obligated to remain impartial to all parties involved, and treat everyone with competence, honesty, integrity, and due care (Rule 36).
One important, but daunting aspect of consulting with a Trustee is that you will likely have to share some personal information. Trustees are bound by the code to keep confidentiality at all times unless agreed upon by the person that the information relates to, or if the law demands it. When dealing with a reputable LIT, your personal information is safe and secure.
Aside from the Code of Ethics for Licensed Insolvency Trustees above, there are other reasons as to why a Trustee is a good professional to consult when dealing with what seems like insurmountable debt.
Many Trustees are also Chartered Professional Accountants. This means that they also have to adhere to the CPA Code of Professional Conduct, which has five fundamental principles of ethics:
- Professional behaviour: Their conduct must maintain a good reputation for the profession and the public.
- Integrity and due care: They must perform services with integrity and due care at all times.
- Objectivity: CPAs cannot allow their work to be affected by conflict of interest, bias, or external influence.
- Professional Competence: They must maintain skills and keep informed of any developments in the field.
- Confidentiality: CPAs cannot disclose any information without proper and specific authority.
Contact Us – We are Here to Help!
Too much debt can create all kinds of problems; from financial, to emotional, to relationships.
At Chase & Associates, we offer a free initial assessment where we will analyze your finances and provide you with information on what options are available to you. This appointment is confidential and non judgemental.