Report on Licensed Insolvency Trustee business practices in the administration of consumer insolvencies
April 28, 2017
Over the past months, the Office of the Superintendent of Bankruptcy (OSB) has conducted a review of Licensed Insolvency Trustee (LIT) business practices to assess risks related to the administration of consumer insolvencies.
The review included LIT practices in the assessment of debtors, the provision of counselling, the development of statutory documentation and service delivery. The nature and extent of LIT reliance on third-party debt consultants to fulfill LIT responsibilities was a key area of focus.
The review identified that the practices of LITs who work in business relationships with debt consultants can generate risk for the integrity of the insolvency process and can negatively impact the financial interests of both creditors and debtors in an insolvency filing. Based on its observations and findings, the OSB will amend elements of the existing regulatory framework, to continue to ensure that the intent and objectives of the Bankruptcy and Insolvency Act, its rules and OSB Directives are achieved.
The Review of Licensed Insolvency Trustee business practices in relation to administration of consumer insolvencies report provides observations and findings from the review, as well as OSB's intended approach for addressing the risks identified.
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