Also known as: Licensed Insolvency Trustee (LIT)
A bankruptcy trustee — now officially called a Licensed Insolvency Trustee (LIT) in Canada — is a federally regulated professional who administers bankruptcies and consumer proposals on behalf of debtors and creditors.
The term "bankruptcy trustee" is still widely used in everyday conversation, but the official designation in Canada is Licensed Insolvency Trustee (LIT). The name changed in 2016 to better reflect the full range of services these professionals provide — not just bankruptcy, but also consumer proposals, receiverships, and other formal insolvency proceedings governed by the Bankruptcy and Insolvency Act.
LITs are licensed and regulated by the Office of the Superintendent of Bankruptcy (OSB), a federal government body. They are required to pass rigorous examinations, maintain ongoing education, and carry professional liability insurance. This federal oversight means that when you work with an LIT, you are working with a regulated professional — not a debt settlement company or credit counsellor.
When you file a consumer proposal or declare bankruptcy, the LIT acts as the administrator of the process. Their responsibilities include:
Crucially, the LIT has obligations to both you and your creditors. They are not a purely debtor-side advocate — they administer the process impartially, in accordance with the law.
If you are currently in a consumer proposal, getting a car loan requires more care than usual. Many proposal agreements include a clause that restricts taking on new credit above a certain threshold without trustee approval. The reason: lenders want assurance you can service both your proposal payments and the new car loan simultaneously. Your LIT reviews the plan and confirms whether the new debt is feasible.
Once your bankruptcy or proposal is fully discharged, the LIT's involvement ends. At that point, your focus shifts to rebuilding credit — and a subprime auto loan from the right lender is often the most accessible positive trade line you can add.
In many cases, yes. Taking on new credit during an active consumer proposal may require your Licensed Insolvency Trustee's approval, as the terms of some proposals restrict incurring new debt. Always confirm with your LIT before applying for any new financing.
A Licensed Insolvency Trustee is federally licensed and is the only professional in Canada who can file a consumer proposal or bankruptcy on your behalf. Credit counsellors help with budgeting and informal debt management plans but cannot file these legal proceedings.
After a bankruptcy discharge, subprime lenders can often approve a car loan, especially once you have rebuilt some credit history. The bankruptcy discharge demonstrates the debt has been cleared, which some lenders view as a fresh start. Income and payment capacity are the primary approval factors.
Discharged or still in process? We work with both.
Many of our customers come to us during or after insolvency proceedings. Let's see what we can find.