Myths and truths about the bankruptcy trustee in Quebec

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Personal bankruptcy in Quebec is a legal process that helps individuals and businesses with financial difficulties to obtain relief from their debts. A bankruptcy trustee is a licensed professional who is appointed by the court to oversee this process. 

There are many myths and truths about the bankruptcy trustee in Quebec and it is important to fully understand his work, that is why, in this article, we will explain everything you need to know. 

What is a bankruptcy trustee in Quebec?

First, it is necessary to define what a bankruptcy trustee is. In Quebec, this is a trustee legally authorized to conduct the bankruptcy proceedings. The role of the bankruptcy trustee in Quebec is to administer the debtor’s assets, determine whether the debtor qualifies for bankruptcy in Quebec and distribute the debtor’s assets to creditors. 

The trustee is also responsible for ensuring that the bankruptcy process is fair and equitable for both the lenders and the debtor.

Myth: Bankruptcy trustees work for creditors.

The first myth we want to debunk is that a bankruptcy trustee in Quebec will work for the creditors. As already stated, his mission is to ensure fairness to all concerned. 

So, although the authorized insolvency trustee is responsible for distributing the debtor’s assets among the creditors, his primary duty is to act in the best interests of all.

Truth: You must be licensed to become a bankruptcy trustee in Quebec. 

It was mentioned earlier that a licensed insolvency trustee must be a licensed professional. Thus, they have received extensive training and education in order to be able to properly accompany you in your process of declaring bankruptcy in Quebec

They are regulated in Canada by the Office of the Superintendent of Bankruptcy and must adhere to strict ethical and professional standards.

Myth: The trustee will keep all your assets.

Another common myth about personal bankruptcy in Quebec is that they will keep all of your assets. This is not true. A bankruptcy trustee in Quebec is obliged to follow the laws, which provide certain exemptions and protections for the debtor’s assets. 

The function of the trustee is to administer the assets and distribute the proceeds among the creditors. However, they cannot keep them all.

Truth: The bankruptcy trustees will evaluate its financial situation.

Since the bankruptcy trustee in Quebec handles issues such as bankruptcy and taxes, it is clear that he or she must evaluate your financial situation.

So, the trustee will review the debtor’s assets, liabilities, income and expenses to determine if the debtor qualifies for bankruptcy. If eligible for bankruptcy, the process and the debtor’s bankruptcy and tax responsibilities will be explained.

Myth: Declaring bankruptcy in Quebec will destroy your credit score.

One myth that must be debunked not only about the bankruptcy trustee in Quebec but about bankruptcy in general is that they will destroy your credit rating.

Although it will have a negative impact on your credit rating, it is not permanent. In fact, many people who file bankruptcy are able to rebuild their bankruptcy over time. The trustee can provide information and resources to help the debtor improve his or her score after bankruptcy.

Truth: Bankruptcy trustees are subject to ethical and professional standards.

Because a bankruptcy trustee in Quebec is a licensed professional, they are subject to strict ethical and professional standards. Thus, they must adhere to these to ensure that the process is transparent and fair. 

This includes acting in the best interests of all parties involved, maintaining confidentiality and avoiding conflicts of interest. If a trustee violates these standards, he or she may face disciplinary action, including fines, suspension or revocation of his or her license.

Myth: Bankruptcy trustees will charge high fees.

Finally, we would like to clarify that bankruptcy trustees do not charge high fees. Although they are entitled to reasonable compensation for their services, their fees are regulated by the Office of the Superintendent of Bankruptcy. 

Thus, the bankruptcy trustee‘s payment in Quebec is based on a set fee, which is determined by the government. This ensures that the charge is reasonable and fair. 

We hope this article has been useful to better understand the work of a bankruptcy trustee. However, if you want to learn more about bankruptcy and taxes you can read our article “A basic guide to Bankruptcy and Insolvency Law” or visit our blog.

If you wish to begin the process of filing for bankruptcy in Quebec, we advise you to contact Poupart Syndic‘s licensed bankruptcy advisors.

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