What a Licensed Insolvency Trustee Does
- Shawn A. Stack
- 2 hours ago
- 2 min read
This topic is explored in much greater detail in Part 4: The People in Your Neighbourhood of my book Beyond Material Salvation – Rethinking Insolvency and Debtor Morality.
But the short answer is this:
A Licensed Insolvency Trustee stands between you and your creditors and ensures that the rules of insolvency are applied.
That is their role.
Most people choose the Trustee they ultimately work with.
Because of this, many people assume they have a client relationship with the Trustee.
Even Trustees frequently refer to bankrupts as "clients."
It makes the experience feel more comfortable.
The problem is that it isn't technically accurate.
When you file bankruptcy, you are not the Trustee's client in the traditional sense.
A client is someone who receives professional advice, representation, or services in exchange for payment.
The Trustee is not paid by you.
The Trustee is paid from funds in the bankruptcy estate.
And those funds ultimately belong to the creditors.
This distinction matters.
Not because the Trustee is your enemy.
But because understanding incentives is important.
The Trustee's role is not to advocate for you.
Nor is it to advocate for your creditors.
The Trustee's role is to administer the insolvency process in accordance with the law.
So what does a Trustee actually do?
A Trustee:
investigates the financial affairs of the bankrupt
identifies and realizes assets when required
collects surplus income payments when required
prepares and files statutory reports
files bankruptcy income tax returns
communicates with creditors
distributes funds to creditors
reports to the Court and the Office of the Superintendent of Bankruptcy
administers the bankruptcy estate from beginning to end
In short:
The Trustee administers the process.
The Trustee is not your representative.
The Trustee is not your advocate.
The Trustee is not your lawyer.
The Trustee is not your financial coach.
The Trustee is a neutral participant in the insolvency system whose responsibility is to ensure that the legislation is properly applied.
Part 9.5 of Beyond Material Salvation, "Would the Real Advocate Please Stand Up?", explores this issue in much greater detail.
Because once you understand the role of the Trustee, a more important question emerges:
If the Trustee is not your advocate—
Who is?
That question is one of the reasons this website exists.
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