When businesses file for bankruptcy or seek to file a commercial proposal, they cannot proceed through these processes without the help of a Licensed Insolvency Trustee (LIT). During insolvency proceedings, LITs play a very important role in working to resolve the debt and satisfy creditors.

What Is The Role Of A LIT?

An LIT has two main functons in administering insolvency proceedings. It must:

1. Deal with creditors on behalf of the business or individual in order to either file a proposal or sell assets in a bankruptcy
2. Pay the creditors once money has been recovered - either through the sale of assets for a bankrupt or, in a proposal situation, ensure that the debtor makes the agreed-upon payments to creditors

All licensed and qualified insolvency trustees are listed on a federal government website. Due to the seriousness of the issues and the level of their function, LITs are required to undergo rigorous qualification requirements.

What Are The Qualifications Of A LIT?

LITs are designated as professionals and are licensed and regulated by the Office of the Superintendent of Bankruptcy. An LIT's educational background typically includes accounting acumen and a university degree. However, they also must qualify to become trustees by taking the following courses and examinations:

• The Chartered Insolvency and Restructuring Professional (CIRP) Qualification Program (CQP)
• The CIRP National Insolvency Exam and the Insolvency Counsellor's Qualification Course, and
• Pass an Oral Board of Examination

These requirements are mandatory in order to ensure that LITs are able to fulfill their functions. LITs are also required to undergo ongoing professional development training in order to stay qualified.