Federally regulated
LITs are licensed and overseen by the Office of the Superintendent of Bankruptcy.
Understand the LIT process, formal options and questions to ask
Licensed Insolvency Trustees in Canada
A Licensed Insolvency Trustee explains every formal debt option available under federal law.
Licensed Insolvency Trustees are federally regulated professionals who help individuals and businesses deal with serious debt problems. They are the only professionals authorized to administer consumer proposals and bankruptcies in Canada. An LIT should review your full financial position and explain both formal and non-insolvency alternatives before you decide.
MoneyMatch Canada is not a Licensed Insolvency Trustee and does not provide insolvency services. Use the Office of the Superintendent of Bankruptcy directory to verify a trustee’s licence.
Formal filing authority
Only an LIT can administer consumer proposals and bankruptcies under the BIA.
Full financial assessment
A trustee reviews assets, debts, income, expenses and alternatives.
Verify the licence
Use the federal LIT directory before sharing sensitive financial information.
Compare practical paths
Start with the structure that fits the problem you are solving
Use these pathways to narrow the decision before comparing current provider or professional terms.
Verify current terms Outcomes are not guaranteed Compare total cost and consequences
LFComparison pathLIT Financial Assessment
A review of your debts, assets, income, expenses and available statutory or non-statutory options.
- Best suited to
- Serious debt problems
- Main value
- Full option review
- Key risk
- Provide complete information
What to verify
- Total cost and important fees.
- Eligibility, conditions and current terms.
- How the option fits your repayment plan.
CPComparison pathConsumer Proposal
A formal offer to creditors to repay a percentage of debt, extend repayment time, or both, administered by an LIT.
- Best suited to
- People able to make proposal payments
- Main value
- Retain assets subject to obligations
- Key risk
- Proposal terms and creditor process
What to verify
- Total cost and important fees.
- Eligibility, conditions and current terms.
- How the option fits your repayment plan.
BComparison pathBankruptcy
A formal insolvency process that can lead to discharge from eligible debts, subject to duties and consequences.
- Best suited to
- When other options are not workable
- Main value
- Formal debt-release process
- Key risk
- Asset, income and credit consequences
What to verify
- Total cost and important fees.
- Eligibility, conditions and current terms.
- How the option fits your repayment plan.
Quick answer
What is a Licensed Insolvency Trustee in Canada?
Start with the core mechanics, then compare the costs and consequences that apply to your situation.
The key point
A Licensed Insolvency Trustee is a federally regulated professional licensed by the Office of the Superintendent of Bankruptcy. LITs can advise on debt options and are the only professionals authorized to administer consumer proposals and bankruptcies. They also explain non-insolvency choices so you can compare consequences before filing anything.
Verify federal licensingSearch the official OSB directory for the trustee or firm.
Bring complete recordsAccurate balances, assets, income and expenses are necessary for a meaningful assessment.
Compare all optionsAsk about budgeting, consolidation, counselling, proposals and bankruptcy where relevant.
Understand the legal processFormal insolvency has statutory duties, timelines and consequences that should be explained before filing.
Fit and caution
When this path may fit — and when to slow down
Use affordability, total cost and the consequences of the option as the main filters.
It may fit when you:
- Your debts are no longer realistically manageable with your current income.
- You need to understand whether a consumer proposal or bankruptcy applies to your situation.
- Collection action or creditor pressure is increasing.
- You want a regulated professional to compare formal and informal debt options.
Pause and compare when you:
- A company claims it can file a consumer proposal without involving an LIT.
- You are being asked to pay a large referral fee before speaking with the licensed trustee.
- The advisor will not explain alternatives or the consequences of filing.
- You have not verified the person or firm in the official federal LIT directory.
Compare structures
Compare the main alternatives before choosing
Different structures can solve similar problems with very different costs, flexibility and consequences.
Licensed Insolvency Trustee
Regulated assessment and formal filings
Compare optionsCredit counsellor
Budgeting and informal repayment help
Compare optionsDebt consolidation lender
New credit to repay debts
Compare optionsDebt settlement company
Negotiation service outside insolvency
Compare optionsBenefits and trade-offs
Potential advantages and disadvantages
Consider both sides of the decision before moving forward.
Potential advantages
- Access to a federally regulated professional with authority under the Bankruptcy and Insolvency Act.
- Can explain both consumer proposals and bankruptcy in the context of your full finances.
- Formal filings are administered within a regulated legal framework.
- The OSB provides a public directory to verify licensing.
Potential disadvantages
- Formal insolvency can affect credit, borrowing and financial records.
- You must provide complete financial information and meet statutory duties.
- A consumer proposal can fail if required payments or obligations are not met.
- Bankruptcy and proposal outcomes depend on individual assets, income, debts and creditor rights.
Use your real numbers before deciding.Compare costs, timelines and alternatives based on what you can actually afford.
Compare Debt-Relief Information Detailed guide
How to evaluate licensed insolvency trustee canada
Use this checklist to move from a headline offer or service description to the details that determine real-world fit.
Verify the trustee before the meeting
Search the Office of the Superintendent of Bankruptcy’s official Licensed Insolvency Trustee directory. Confirm the professional or firm you are dealing with is actually licensed.
Prepare a complete financial picture
Bring creditor statements, collection notices, income information, monthly expenses, asset values, secured debts and any legal or garnishment documents you have received.
Ask for every realistic option
An assessment should explain relevant non-insolvency and insolvency choices, not push you immediately toward one filing. Ask about expected cost, duration, creditor treatment, assets and credit consequences.
Understand a consumer proposal before filing
A consumer proposal is a formal, legally binding process administered by an LIT. For an individual consumer proposal, eligible debts cannot exceed the statutory limit excluding a mortgage secured by the principal residence, and the proposal term cannot exceed five years.
Understand what happens after a filing
Ask about required payments, counselling sessions, reporting obligations, creditor communication and what could cause a proposal to be annulled or affect a bankruptcy discharge.
Decision framework
How the main options differ
Use the table as a starting framework, then verify the details that apply to you.
| Comparison point | LIT | Credit counsellor | Consolidation lender | Settlement company |
|---|---|---|---|---|
| Can administer consumer proposal | Yes | No | No | No |
| Can administer bankruptcy | Yes | No | No | No |
| Primary role | Regulated debt assessment + insolvency administration | Budgeting + informal repayment | Provide new credit | Negotiate settlements |
| Verify through | OSB LIT directory | Organization and credentials | Provincial/federal lender information | Business and service credentials |
This framework is educational and does not replace current provider agreements, professional advice or a review of your complete financial circumstances.
Interactive planning tool
Prepare a repayment-capacity snapshot for an LIT meeting
Compare unsecured debt with the amount you could direct to debt over a chosen period. This is not a consumer-proposal quote.
Planning estimator
Use your own numbers
Adjust the fields to create a simple planning snapshot before comparing current provider or professional terms.
Primary estimate
Amount available over period—Debt not covered by that amount—
Monthly amount to repay 100%—
Planning illustration only. A consumer proposal is not calculated by this formula. An LIT considers your complete financial circumstances, legal requirements and what creditors may accept. Consumer proposal terms cannot exceed five years.
Next step
Understand formal and non-formal debt options before filing
MoneyMatch can help you organize the alternatives and educational resources so you arrive at an LIT consultation with clearer questions and a complete financial picture.
Compare fit before committing.
Use MoneyMatch to organize relevant options and educational resources. Always confirm current terms and consequences with the provider or regulated professional.
How MoneyMatch evaluates fit
Our comparison methodology
We organize financial paths around total cost, affordability, eligibility, flexibility, consumer protections and material consequences.
Fit with the problem
We start with what the user is trying to accomplish and whether the structure actually addresses that need.
Complete cost
We include material fees, interest, repayment time and other costs that can change the outcome.
Trade-offs and protections
We explain eligibility, flexibility, consumer protections and consequences instead of ranking by one headline feature.
Last reviewed: August 7, 2026 · Author: Money Match Canada · Consumer information checked against Office of the Superintendent of Bankruptcy: What is a Licensed Insolvency Trustee?.
Advertising disclosure: MoneyMatch may receive compensation from some provider links at no extra cost to you. Compensation does not determine approval, rates, legal outcomes or whether an option is suitable for you.
Frequently asked questions
Licensed Insolvency Trustee Canada questions
Clear answers to common questions Canadians ask before choosing this path.
What does a Licensed Insolvency Trustee do?
An LIT assesses financial difficulties, explains debt options and is authorized to administer formal insolvency proceedings such as consumer proposals and bankruptcies.
Are Licensed Insolvency Trustees regulated in Canada?
Yes. LITs are federally regulated and licensed by the Office of the Superintendent of Bankruptcy.
Is an LIT the only person who can file a consumer proposal for me?
An LIT is the professional authorized to administer a consumer proposal under Canada’s federal insolvency system.
Do I have to file bankruptcy if I meet with an LIT?
No. A meeting is an opportunity to review your financial situation and available options. Bankruptcy is only one possible path.
How can I verify a Licensed Insolvency Trustee?
Use the Office of the Superintendent of Bankruptcy’s official Find a Licensed Insolvency Trustee directory.
What should I bring to an LIT consultation?
Bring a complete list of debts, recent creditor statements, income information, monthly expenses, asset details and any collection or legal notices.
Is MoneyMatch Canada a Licensed Insolvency Trustee?
No. MoneyMatch Canada provides general educational and comparison information and does not administer consumer proposals or bankruptcies.
Compare the next step with your full situation in mind.
Use MoneyMatch to organize your options, then verify current terms and important consequences before moving forward.