Licensed Insolvency Trustee in Canada: What They Do, Fees, and How to Verify One

A Licensed Insolvency Trustee (LIT) is the federally licensed professional who administers every personal bankruptcy in Canada and most consumer proposals, and is the only professional the Bankruptcy and Insolvency Act authorizes to do so.

Information last verified on 2026-09-24. This article has not yet been reviewed by a licensed lawyer.

This article addresses who a Licensed Insolvency Trustee is under the federal Bankruptcy and Insolvency Act (BIA), RSC 1985, c B-3, and the Office of the Superintendent of Bankruptcy (OSB) directives that govern trustee licensing and consumer proposal costs, both of which apply the same way across every province and territory. It covers how to check a licence, what a trustee's fees look like, mandatory counselling, warning signs of an unlicensed debt consultant, and how to raise a concern with the OSB. It does not explain how a bankruptcy or a consumer proposal itself works once a trustee is retained; for that, see Bankruptcy in Canada and Consumer Proposal in Canada. This article does not name or recommend any specific trustee or firm; use the official directory below to find and verify one.

What a Licensed Insolvency Trustee Is

A Licensed Insolvency Trustee is not a job title anyone can use. BIA s.13(1) requires "a person who wishes to obtain a licence to act as a trustee" to file an application with the Superintendent of Bankruptcy in the prescribed form, and the Act routes both bankruptcy assignments and consumer proposals through that licensed role. For a consumer proposal specifically, BIA s.66.13(1)(a) requires the consumer debtor to "commence proceedings by obtaining the assistance of an administrator," and s.66.11 defines "administrator" as "a trustee, or a person appointed or designated by the Superintendent." In practice, the professional most Canadians deal with for either a bankruptcy or a consumer proposal is a Licensed Insolvency Trustee.

Acting as a trustee without holding that licence is a criminal offence, not just an ethics violation. BIA s.202(1)(a) makes it an offence, punishable on summary conviction, for a person who is "not being a licensed trustee" to "do any act as, or represent himself to be, a licensed trustee," carrying a fine of not more than $5,000, imprisonment of not more than one year, or both.

The federal government's own consumer messaging states plainly why this licence matters: "LITs are the only federally regulated professionals in Canada authorized to provide government-regulated solutions like consumer proposals or bankruptcies." That same messaging adds that LITs are "bound by a Code of Ethics and required to assess your financial situation and explain all available options, including non-insolvency alternatives, to help you make a fully informed decision."

How to Check Whether Someone Is Actually a Licensed Trustee

Before working with anyone who calls themselves a trustee, debt consultant, or insolvency professional, verify their licence directly with the federal government rather than taking a website's word for it. A Government of Canada news release on the OSB's Financial Literacy Month partnership with the Canadian Association of Insolvency and Restructuring Professionals (CAIRP) tells Canadians: "Verify credentials: Use the OSB's online directory to find a Licensed Insolvency Trustee near you." That directory is a government tool, not a private or commercial referral service, and it is available at the OSB's Licensed Insolvency Trustee directory.

This article does not name or recommend any specific trustee or firm. Use the directory above to identify and verify a trustee near you, and treat that verification step as something to do before, not after, sharing financial information or paying anyone.

What a Trustee's Fees Look Like

Trustee and administrator fees for a consumer proposal are not left to negotiation; they are set out in the BIA General Rules. Rule s.129(1) fixes the current administrator tariff for a consumer proposal: "$750, payable on filing a copy of the consumer proposal with the official receiver; $750, payable on the approval or deemed approval of the consumer proposal by the court; [and] 20 per cent of the moneys distributed to creditors under the consumer proposal, payable on the distribution of the moneys." Rule s.131(1) separately fixes counselling fees at "$85 per session if counselling is provided on an individual basis, and $25 per person per session if counselling is provided on a group basis."

Those are the figures currently in force. A Canada Gazette Part I notice published 2025-11-29 proposes raising them to $850 plus $850 plus the same 20 percent, and to $120 individual or $35 group counselling. As of this article's verification date, that proposed regulation has not been registered as final, and even once registered its own coming into force clause delays the new figures by a further year, so the $750/$750/$85/$25 figures above remain current. Check the Canada Gazette and the BIA General Rules directly if you are reading this well after September 2026.

A bankruptcy handled as a summary administration, the streamlined process for smaller estates, has its own tariff. General Rules s.128(1) calculates the trustee's fees on the estate's receipts, after necessary realization disbursements and payments to secured creditors: "(a) 100 per cent on the first $975 or less of receipts; (b) 35 per cent on the portion of the receipts exceeding $975 but not exceeding $2,000; and (c) 50 per cent on the portion of the receipts exceeding $2,000." Section 128(2) lets the trustee claim certain amounts in addition to those fees. A Licensed Insolvency Trustee can explain the cost of your specific situation at a first meeting, which the OSB says trustees typically do not charge for.

Mandatory Counselling

Both an individual bankrupt and a consumer debtor filing a consumer proposal must attend mandatory financial counselling, and the requirement is exactly two sessions, not three and not ten. OSB Directive No. 1R8, Counselling in Insolvency Matters, states that the counselling "shall consist of the following two sessions: (a) a first session to be conducted (i) between ten (10) and ninety (90) days following the date of the initial bankruptcy event or the filing of a consumer proposal; or (ii) within ten (10) days following the first meeting of creditors held pursuant to subparagraph 57 (c) (i) of the Act where a Division I Proposal was refused by the creditors; and (b) a second session to be conducted after a period of at least thirty (30) days following the first session, but prior to the discharge, in the case of an individual bankrupt, or of the issuance of the certificate of full performance, in the case of a consumer debtor." Refusing counselling blocks the automatic discharge or the certificate of full performance.

A "three sessions" or "ten sessions" figure sometimes circulates online. That number describes a trainee counsellor's own supervised practice quota for becoming registered to provide counselling, not the number of sessions a debtor has to attend. Do not confuse the two.

Unlicensed "Debt Consultants": Warning Signs

Search results for insolvency topics are full of marketing from licensed trustee firms and, separately, from unlicensed operators offering to "fix" debt outside the regulated system. The same Government of Canada release on the OSB and CAIRP partnership warns Canadians directly about this: "Avoid unlicensed debt advisors claiming insolvency expertise. ... Unregulated or unlicensed advisors may advertise quick-fix debt solutions or charge high fees for services they are not licensed to provide or for unnecessary services offered before, during or after a consumer proposal or bankruptcy filing."

The same release lists specific red flags to watch for: "Be wary of anyone who guarantees to 'erase' debt or 'fix' credit scores or asks for large upfront payments before explaining your options. These unregulated advisors may rely on high-pressure sales tactics or urge you to take out new high-interest loans to pay their fees, which can worsen your financial situation." None of those tactics, a guaranteed outcome, a large upfront fee, or pressure to borrow more to pay someone else's fee, come from a Licensed Insolvency Trustee's regulated process.

How to Raise a Concern With the OSB

The Office of the Superintendent of Bankruptcy is the federal regulator for Licensed Insolvency Trustees, and it accepts complaints about a trustee's conduct directly from the public. The OSB's own guidance is specific about the format: "Ethical complaints against Licensed Insolvency Trustees (LITs) must be submitted in writing." A complaint can be filed through the OSB's online complaint form, by mail to the OSB's national headquarters, or by phone or fax. A written complaint should include a concise description of the allegation and how it breaches the BIA or the Companies' Creditors Arrangement Act, along with supporting evidence and, where possible, the relevant sections of any supporting documents.

Raising a concern with the OSB is a separate step from the trustee's own Code of Ethics obligations described above; it is the mechanism for asking the regulator itself to look into a specific trustee's conduct.

Disclaimer: This article provides general information about Licensed Insolvency Trustees under the federal Bankruptcy and Insolvency Act, RSC 1985, c B-3, and Office of the Superintendent of Bankruptcy directives current as of September 2026. It is not legal advice, and it does not name or recommend any specific trustee or firm. Fee and counselling figures are subject to a pending, not yet registered regulatory amendment described above. Verify a trustee's licence through the OSB's own directory and consult a Licensed Insolvency Trustee or a lawyer licensed in your province for advice on your specific situation.

Frequently Asked Questions

What is a Licensed Insolvency Trustee?

A Licensed Insolvency Trustee (LIT) is a professional licensed by the federal Superintendent of Bankruptcy under BIA s.13(1) to administer bankruptcies and, in most cases, consumer proposals. Acting as a trustee without that licence is an offence under s.202(1)(a). LITs are the only federally regulated professionals in Canada authorized to provide government regulated insolvency solutions.

How do I check if someone is really a Licensed Insolvency Trustee?

Use the Office of the Superintendent of Bankruptcy's own public directory rather than relying on a website's self description. This article does not name or recommend any specific trustee; verify a specific person's licence directly through the government directory before sharing financial information or paying anyone.

How much does a Licensed Insolvency Trustee charge?

For a consumer proposal, the current tariff under BIA General Rules s.129(1) and s.131(1) is $750 payable on filing, $750 payable on court approval, 20 percent of money distributed to creditors, and $85 per individual counselling session or $25 per person for group counselling. A proposed increase to $850/$850/$120/$35 has been published for comment but is not yet in force. For a bankruptcy handled as a summary administration, General Rules s.128(1) sets the trustee's fees as a percentage of the estate's receipts: 100 percent of the first $975, 35 percent of receipts from $975 to $2,000, and 50 percent above $2,000. A trustee can explain the cost of your specific situation.

How many counselling sessions do I have to attend?

Exactly two, under OSB Directive No. 1R8, for both an individual bankrupt and a consumer debtor filing a consumer proposal. A higher figure such as three or ten sessions that sometimes circulates describes a trainee counsellor's own supervised practice requirement, not the debtor's obligation.

What are the warning signs of an unlicensed debt consultant?

A Government of Canada release on the OSB and CAIRP partnership flags guarantees to erase debt or fix your credit score, requests for large upfront payments before your options are explained, high pressure sales tactics, and pressure to take out a new high interest loan to pay someone else's fee. Only a Licensed Insolvency Trustee is authorized to provide government regulated bankruptcy and consumer proposal services.

How do I file a complaint against a trustee?

The Office of the Superintendent of Bankruptcy accepts complaints about a Licensed Insolvency Trustee's conduct. Ethical complaints must be submitted in writing, either through the OSB's online complaint form, by mail to its national headquarters, or by phone or fax, and should describe the alleged breach of the BIA or the Companies' Creditors Arrangement Act along with supporting evidence.

Can anyone other than a Licensed Insolvency Trustee file my bankruptcy or consumer proposal?

For a bankruptcy, no; the BIA routes bankruptcy assignments through a licensed trustee. For a consumer proposal, the Act technically allows an administrator, defined as a trustee or a person appointed or designated by the Superintendent, but in practice a Licensed Insolvency Trustee is the professional most consumer debtors will work with.