Do I need a Bankruptcy Lawyer?

Francois Gilbert - Licensed Insolvency Trustee     FRANÇOIS GILBERT – Licensed Insolvency Trustee (LIT)

do I need a bankruptcy lawyer in Ontario

Who can help me with declaring bankruptcy in Ontario?

Many Canadians that are facing insolvency start looking for solutions by searching for a “Bankruptcy Lawyer,” believing that this is the title given to professionals who are licensed to help with personal bankruptcy or formal debt settlement. This is not the case! Only Licensed Insolvency Trustees (LITs) can administer bankruptcies or consumer proposals in Canada. The confusion is partly due to the American insolvency system, which is very different. In the USA, there are various forms (chapters) of bankruptcy, administered by specialized bankruptcy lawyers. The Canadian system does not use lawyers. We have a unique designation called “Licensed Insolvency Trustee.”

You cannot file a bankruptcy or consumer proposal without a Licensed Insolvency Trustee (LIT). No other professional in Canada has the authority to submit the necessary documents to start the federally regulated debt settlement process. LITs are highly trained debt professionals and are experts in dealing with insolvency. They are more than able to answer all of your debt-related questions. Many Licensed Insolvency Trustees have experience in various other financial industries and can help bring a new level of understanding to your financial situation. In order to become licensed, they must spend three years learning the ins and outs of Canadian bankruptcy law and pass challenging written and oral exams. This system ensures that every LIT is an insolvency expert. If you are looking for an alternative to bankruptcy, a Licensed Insolvency Trustee is still your best resource. You can meet with a Trustee for a free consultation to review your situation and determine what options are available.

Know who to look for!    Do I need a bankruptcy lawyer?

Don’t get stuck looking for a bankruptcy lawyer, when what you need is a Licensed Insolvency Trustee. Knowing the differences between a bankruptcy lawyer and a LIT can save you valuable time and help you get started on the right path. A LIT will be able to guide you through Canada’s complex insolvency laws, with your goal of debt freedom in mind. At Fontaine & Associates, we know that most people are not experts in debt settlement or financial planning. You don’t have to worry about being mocked or feeling judged. We offer a free initial consultation to help you understand what all of your options are. We will listen to your situation and make sure we understand your goals. It is a confidential, risk-free meeting with no obligations attached to it.

Where the law comes in: The Bankruptcy & Insolvency Act (BIA)    Bankruptcy and Insolvency Act

The Bankruptcy & Insolvency Act is a vital piece of Canada’s legislation that outlines all laws and regulations involving bankruptcy, consumer proposals, and receiverships. It establishes the authority of the Office of the Superintendent of Bankruptcy (OSB) and defines the role of Licensed Insolvency Trustees. LITs are expected to have an intimate relationship with, and in-depth knowledge of, the Act starting from the moment they begin studying. Their role is to make sure that you understand what options are available to you through the Act, and that the proper procedures are followed in accordance with the Act. Both you and your creditors are given consideration and treated fairly throughout the process.

In addition to their education and training with the BIA, LITs are overseen by the OSB. They must comply with federal standards of practice and adhere to a strict code of ethics, which forms part of the Bankruptcy and Insolvency General Rules, included in the BIA. This system ensures that Canadians are protected both as debtors and as creditors and that insolvency proceedings are the same across the country. If you have any questions about bankruptcy laws in Canada, your Trustee will be able to answer those for you.

But there are professionals who call themselves “Bankruptcy Lawyers”… What do they do?    bankruptcy lawyers in Ontario

Yes. There are lawyers in Canada who call themselves “Bankruptcy Lawyers.” These are professional lawyers offering paid consultation and representation services mostly for businesses and corporate insolvency proceedings. They cannot file the necessary documentation for a bankruptcy or consumer proposal or administer the process. They serve clients who are generally unfamiliar with the process or require legal representation for an adversarial insolvency case. It is extremely rare to have any lawyer involvement In a personal insolvency case. Instead, bankruptcy lawyers work almost exclusively with corporate insolvency clients. Their role is to provide legal defence and advocate for their clients. A LIT may, at times consult a bankruptcy lawyer if there is a dispute or discharge hearing for a personal bankruptcy case. Again, this is rare. Personal bankruptcies generally do not require assistance from any lawyers.

A Quick Recap :

  • Licensed Insolvency Trustees are experts in bankruptcy law and insolvency proceedings in Canada.
  • LITs are federally regulated and overseen by the Office of the superintendent of bankruptcy.
  • Only a LIT can administer bankruptcy and consumer proposal filings.
  • A “Bankruptcy Lawyer” is a professional lawyer who will represent their clients, mostly in corporate insolvencies.
  • It is rare for a lawyer to participate in a personal insolvency case.
  • If you are considering bankruptcy or would like to know your options, you can meet with a LIT for a free and confidential consultation meeting.

What is the difference between a Bankruptcy Lawyer and a Licensed Insolvency Trustee?    the difference between a lawyer and a Licensed Insolvency Trustee

By now you hopefully understand the difference between the Canadian bankruptcy system and the American bankruptcy system. Here, we are not going to be talking about American Bankruptcy Lawyers. We will be referring to Canadian lawyers who focus on insolvency law and are sometimes referred to as Bankruptcy Lawyers.

Lawyers may practice in several areas of law, including insolvencies, or debtor-creditor law. These bankruptcy lawyers will offer services and expertise related to commercial disputes and creditor rights. A company may hire a lawyer to guide them through the process of recovering unpaid debts and represent their interests throughout any insolvency proceedings. When it comes time to declare bankruptcy, a lawyer cannot administer this process for you. They can continue to provide advice and support, but you will need a Licensed Insolvency Trustee to take care of the rest.

Licensed Insolvency Trustees are not lawyers, but they are experts in bankruptcy and insolvency law. They have the highest level of training of any debt counsellor or professional in Canada. They do not have a law degree, but they have completed years of strenuous study, complete with written and oral examinations. Their role in the bankruptcy and insolvency process is federally legislated, making them the only professionals able to administer insolvency proceedings. Trustees are unbiased and do not lean in favour of the debtor or the creditors. They ensure that the debtor knows what options are available, and then that the process unfolds in accordance with the Bankruptcy and Insolvency Act.

When do I need a Bankruptcy Lawyer?    When do I need a bankruptcy lawyer?

Firstly, if you are an individual contemplating personal bankruptcy as an option to get out of debt, you likely DO NOT need a bankruptcy lawyer. Here are some situations where you may require legal assistance from a lawyer:

  • You are a lender or creditor, and you want advice or counsel on how to recover unpaid debts or what to do when a debtor declares bankruptcy.
  • You are an officer or director of a distressed company, and you want to understand your liability or have representation through the insolvency proceedings.
  • You want to dispute something and would like advice or representation.

When Do I need a Licensed Insolvency Trustee?    Is it time to talk to a Licensed Insolvency Trustee?

Remember that most LITs offer a free consultation meeting. This means that you can consult with a Trustee early on as you are figuring out what the best course of action is for your personal or business finances situation. If you find yourself in any of the following circumstances, you may want to set up an appointment with a LIT:

  • You are overburdened by debt and are unable to pay everything that you owe.
  • You owe a significant amount to the CRA that you are unable to pay.
  • You have an outstanding debt that you cannot pay, and the debtor is threatening to take legal action to recover the debt.
  • You are being contacted non-stop by collection companies demanding payment and threatening legal action if you are unable to pay.
  • Your wages are currently being garnished or are at risk of being garnished.
  • You are having trouble managing multiple payments to different creditors, and you are unable to consolidate your debt through a loan or debt management plan.
  • You have outstanding student loans that you cannot pay, and it has been at least seven years since you completed your studies.

Your next step:

Talk to a Licensed Insolvency Trustee for Bankruptcy in Ontario

Contact Fontaine & Associates today for help with your personal or business debts. We are happy to meet with you for a free consultation to learn your situation and show you what options are available to you. Bankruptcy is not the only option and is often only a last resort.

There is a great peace of mind that comes with knowing that you have options and that there is a way out of debt. We know it can seem intimidating, but meeting with a Licensed Insolvency Trustee is not scary. We will not mock or judge you. We will LISTEN to you and make sure we understand your situation. Get in touch today to set up a free consultation appointment.


Francois Gilbert - Licensed Insolvency TrusteeFRANÇOIS GILBERT

Licensed Insolvency Trustee (LIT)


Francois obtained his CPA accounting designation in 1995, his CIRP insolvency designation in 1998 and became a Licensed Insolvency Trustee (LIT) in 1999. He has been working in the field of insolvency since graduating from the University of Ottawa in 1991 and has been with Fontaine & Associates since 2002. Prior to that, Francois was working in the Ottawa office of PwC.

Francois has been helping individuals solve their debt problems now for over 20 years by providing advice on credit counselling, consumer proposals and personal bankruptcies. He also has extensive experience in business restructuring.

When he is not at work, Francois spends most of his time with his wife and kids doing outdoor activities and he also volunteers with local non-for-profit organizations in the Ottawa area from time to time. He is an avid musician and plays the keyboard, mainly for his own enjoyment.

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