A: The federal government licenses trustees. When you first encounter financial problems, a trustee can help you to assess your situation and decide upon the best course of action. If you decide to go into bankruptcy, the trustee will prepare the necessary documents. When you are assigned into bankruptcy, your trustee effectively owns all of your assets, except for those that are exempt (eg. a vehicle up to value of $5000). Their job is to deal with each creditor neutrally, and to fairly divide up your assets among those creditors. The trustee’s primary obligation is to your creditors – not to you. This means that their job is to get as much out of your estate as possible for the creditors.
Your trustee will also have a say in every financial decision made by you during this time. For example, your trustee could stop you from giving money to a charity or from giving an expensive gift to your child. Lastly, your trustee prepares a report recommending whether or not the court should discharge you.
The trustee-in-bankruptcy is an officer of the courts and technically reports to the Superintendent of Bankruptcy. The trustee-in-bankruptcy has a legal obligation to ensure that your creditors get some payment to satisfy the debts you owe, or to reasons acceptable in law. The trustee-in-bankruptcy is not there to do you any favours – the trustee-in-bankruptcy is there to sort out your financial obligations.
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