For those of you who don't know me,
my name is Ira Smith, president of Ira SmithTrustee and Receiver Inc.
First, we hope that you and your family
continue to be safe, healthy and secure during this COVID-19 pandemic.
I want to assure you that the Ira Smith Team is fully operational.
Both Brandon Smith and myself are holding telephone consultations,
telephone conference call meetings and video meetings.
So if you have any questions at all about this blog or anything else,
feel free to either shoot us a message or give us a phone call.
We would love to hear from you.
We noticed over the last couple of weeks that there's been a lot of online
searches, an increase in online searches for the term "bankruptcy trustee"
so Brandon thought given that increased interest, he would do a general blog
on the kinds of questions we are asked about being a bankruptcy trustee.
So I hope you can watch until the end
of this video because I know you will get value from it.
What is a bankruptcy trustee?
Well, firstly, bankruptcy trustee is the old name.
It's what we used to be called.
The new name authorized and mandated
by the Superintendent of Bankruptcy is a licensed insolvency trustee.
What a licensed insolvency trustee is.
It is the only professional
in Canada licensed, authorized, regulated and supervised
by the government of Canada through the Office of the Superintendent
of Bankruptcy in order to carry out insolvency assignments.
These assignments could be trustee of a personal bankruptcy,
corporate bankruptcy,
trustee under a restructuring proposal,
an administrator of a consumer proposal, or acting as a receiver, receiver-manager
or as a monitor under the Companies' Creditors Arrangement Act.
In order to become a licensed insolvency trustee first you need to get employment
with a qualified licensed insolvency trustee firm.
Then you take a series of courses
that are operated by our national association,
the Canadian Association of Insolvency and Restructuring Professionals.
When you've passed the exams,
including the final exam, then our association will give you
the designation of Canadian Insolvency and Restructuring Professional - CIRP.
Then you can apply
to the federal government through the Office of the Superintendent
of Bankruptcy to sit an oral exam before the Oral Board
of Examiners that is run by the Superintendent's office.
You have to go through a qualification
process, you have to have your CIRP, you have to have also passed
the national insolvency counsellour course and you then get vetted.
It's an RCMP check to make sure you have good character,
you do not have any criminal record, that you are solvent.
And then you sit before the oral board of examiners.
The board then decides whether you have met the requirements to get
awarded your LICENSED INSOLVENCY TRUSTEE
designation, your license and makes its recommendations
to the Office of the Superintendent of Bankruptcy.
And if approved, then you get your license
as a licensed insolvency trustee.
Normally there are some qualifications,
such as you have to stay with your existing employer or
a different approved employer for two years after getting your license.
And then it becomes an unqualified license.
If you're looking for a bankruptcy trustee, how do you go about finding one?
Well, there are three ways that we recommend.
First, and the best way, is to get
a referral from a friend or a family member.
Now,
that friend or family member may or may
not have gone through a bankruptcy or consumer proposal.
If they have that personal experience, then that is the best,
if they're willing to recommend the trustee they went to. Or they may know
someone, a good friend that they trust, who is a licensed insolvency trustee.
Or they may know a lawyer or an accountant who has had dealings with one or more
bankruptcy trustees and is prepared to recommend one or more of them.
That is the best way a personal reference.
The second way is you can go to the Superintendent of Bankruptcy's website
and they run a database of all licensed insolvency trustees across Canada.
You can search by name, by city, by province
to find
one or more names.
And the third way is by doing an online Internet search.
Search for words like bankruptcy trustee,
bankruptcy trustee near me or
bankruptcy trustee AND the name of your city or town and see what comes up.
Then you could scour several websites
to see which ones kind of hit you, make you feel the right way,
and then you can make an appointment for a no cost consultation to make sure
that the recommendations you're getting makes sense to you and that
you get a feeling that you can work with that bankruptcy trustee.
The final question we are always asked is
how are the fees of a bankruptcy trustee calculated?
Well, it depends on what kind of administration.
In a summary administration bankruptcy, which is a personal bankruptcy where
the assets are not expected to realize more than $15,000
or in a consumer proposal.
The fee is set by the Bankruptcy and Insolvency Act.
The rules of the Bankruptcy and Insolvency Act say that the fee of a trustee either
in a summary administration, personal bankruptcy or in acting as
administrator of a consumer proposal are fixed.
It's called a tariff so
the trustee can calculate its fee and disbursements based on the tariff,
the regulated fee set by the government of Canada.
If there are not enough assets in the bankruptcy administration,
the trustee
will ask the debtor
to get a third party who will either guarantee the trustee'S or the consumer
proposal administrator's fee or put up a cash retainer.
In an ordinary bankruptcy, which is where the assets
are supposed to realize, anticipated to realize more than $15,000 in a personal
bankruptcy or for every corporate bankruptcy
or in a Division one Part three proposal, which is for people who owe
more than $250,000 other than for any mortgages registered against
their home or for any company. Either bankruptcy or proposal,
the ordinary bankruptcy administration or the Part three Division one proposal
area applies.
In that case.
It's like going to a lawyer or an accountant.
It's basically the number of hours spent
by each level of staff at the bankruptcy
trustee firm at their respective hourly rates in either an ordinary administration
bankruptcy or in a Part three Division one proposal.
Ultimately, the bankruptcy trustee fee has to be approved by the court.
The court will review
the fees being charged and make
a determination whether it's reasonable or not.
Again, if the trustee does not believe
there will be sufficient free assets to pay for the administration,
the trustee will ask the debtor to get a third party who will either guarantee
or put up a cash retainer for the fees. In a receivership,
it's the same thing - number of hours,
hourly rate by each level of staff. In a private appointment
the fees have to be approved by the secured creditor who appointed
the receiver. In a court appointed receivership,
again, it is the court that has to approve the fee and disbursements of the receiver.
So I hope this video helps
you better understand what a bankruptcy
trustee is, how you become a bankruptcy trustee, and how the fees are calculated
in the various administrations a bankruptcy trustee can do,
and what the different roles a bankruptcy trustee can play are.
I encourage you to read the entire Brandon's Blog down below,
which has a lot more detail in it than I put in this video.
Again, the Ira Smith Team hopes that you
and your family are safe, healthy and secure.
Both Brandon Smith and myself
are available to talk with you on the telephone, meet with you via video chat,
to answer any questions you might have
about this Brandon's Blog or anything else.
So shoot us an email message or give us a phone call.
We would love to speak with you.
We would love to help you.