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While the Canadian economy is showing signs of progress, consumer bankruptcies are unfortunately increasing as well. The number of insolvencies in Canada, including proposals for bankruptcy in Toronto, have jumped by 9.7 percent in April 2013. Thus, despite the fact that consumers have greater purchasing power these days, there's an increased demand for reliable bankruptcy trustees. Bankruptcy is actually a complicated matter though: not everyone who can't pay off their debts are automatically deemed “bankrupt” by the court. This is why there are proposals for bankruptcies. If one's proposal for bankruptcy is accepted, his unsecured debts get terminated and he becomes protected from any legal action pertaining to his debts--all at the cost of a bad credit history and the relinquishment of his assets to creditors. This is where a qualified trustee in bankruptcy can come in. It's his job to administer the bankruptcy proposal quickly and properly, hoping that the local court approves it. In the meantime, the debtor entrusts him with the management of his personal belongings and finances, mainly to see which of these must be liquidated to pay off the debt. That said, a trustee doesn't really work in favor of the debtor nor the creditor; his job is simply to make sure that the bankruptcy process goes on smoothly. A trustee is responsible for protecting the rights of the debtor from penalties that may be inflicted on him like wage garnishes (i.e. deducting the debtor's salary to pay off the debt). On the other hand, the trustee must also see to it that the debtor fulfills his responsibilities during the bankruptcy process and that the creditors are properly provided with payments (derived from funds from the sale of assets). If the option is available, a trustee can also help the debtor file a consumer proposal. This option enables one to actively pay off his debt to creditors without fear of losing his assets. However, this is only possible if certain conditions are met, like his debts don't exceed $250,000. Whether it is filing a consumer proposal or filing a bankruptcy proposal, a trustee would be the best help that a debtor can have. A trustee can also help evaluate the situation first to know which option is more ideal for the debtor. For more information about trustees and declaring bankruptcy, visit bankruptcy-canada.ca/choosing-bankruptcy-trustee.htm.
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