How to Become a Licensed Insolvency Trustee
If you’ve ever used the services of a Licensed Insolvency Trustee (LIT), chances are that your experience was excellent overall. These federally licensed financial professionals help individuals struggling with debt or financial difficulties through several processes. These processes may include consumer proposals, debt counselling, bankruptcy or business-related services.
As LITs do provide such a great service, it may also interest those with a knack for numbers and a desire to give back as a potential career. Becoming a LIT, however, is no simple task. It requires years of hard work, training and dedication. Let’s look at the full process in more detail.
Directive No. 13R7
As all Licensed Insolvency Trustees (LITs) are licensed through the Office of the Superintendent of Bankruptcy (OSB), this is the place to start for information about becoming an LIT. The OSB provides information on the prerequisites in Directive No. 13R7. This directive lists the following prerequisites for an individual license:
- Successful completion of the CIRP Qualification Program (CQP)
- Successful completion of the CIRP National Insolvency Exam
- Successful completion of the Practical Course on Insolvency Counselling (PCIC), or a valid Insolvency Counsellor’s Qualification Course Certificate
- Payment of the prescribed fee
- The applicant must be solvent
- The applicant must be of good character and reputation
- The applicant must pass the Oral Board of Examination
As it concerns items 4 through 7, these are fairly straightforward. However, the first three items, which reference specific courses, require further discussion.
CAIRP Training
Through a Memorandum of Understanding (MOU), the OSB delivers all training through the Canadian Association of Insolvency and Restructuring Professionals (CAIRP). CAIRP is a non-profit organization with over 40 years of experience advocating for a fair, transparent and effective system of insolvency.
The prerequisite to attend CAIRP training is much less onerous than the requirements for applying for your Licensed Insolvency Trustee (LIT) license. To apply, you must either:
- Hold a relevant professional designation relating to the accounting or auditing field recognized in Canada
OR
- Hold an undergraduate degree from a recognized post-secondary institution
They further offer recommendations for training courses in relevant fields, like business law, financial accounting and others. Still, they retain full control over accepting or rejecting potential candidates on a case-by-case basis.
The Oral Board of Examination
After successfully completing the necessary training programs mentioned above, applicants will then have to challenge the Oral Board of Examination. This is one of the most rigorous components of the entire process and will challenge all the skills that applicants have learned so far.
The Application Process
After completing the final component of the training program, applicants will receive instructions and information about how to apply for, and keep current, their license to practice as a Licensed Insolvency Trustee. This includes an online portal through which they can pay relevant licensing fees and update their contact information.
Things to Consider
As you can see, the process for becoming an LIT is long and rather complicated. Though we didn’t discuss the length of time required to complete all the courses, starting with a four-year degree from a post-secondary institution is a good indication of the time requirement. And, as if the requirements weren’t stringent enough, it is also an incredibly difficult process throughout.
As this article explains, less than half of those who challenge the exam pass on their first try. While 72.7% of applicants eventually pass (in subsequent attempts), becoming an LIT is no picnic. But, as those who have gone through the process will attest, the ability to help others makes it all worthwhile in the end.