September 5, 2017

This is one of the biggest myths in the insolvency industry that is used by debt consultants to scare people away from trustees.

Bankruptcy trustees are administrators of a piece of legislation that sometimes benefits creditors but most often benefits debtors, by providing mechanism to find relief from the burden of debt.  The legislation is filled with complex rules and regulations that are designed to ensure fair and equitable treatment of all concerned parties.

The Bankruptcy and Insolvency Act (“BIA”) also sets out Rules and Regulations that govern trustees in bankruptcy.  Rules 34 – 53 set out a “Code of Ethics for Trustees” – the following are just some of the rules:

Rule 34:

Every trustee shall maintain the high standards of ethics that are central to the maintenance of public trust and confidence in the administration of the Act.

Rule 38:

Trustees shall not assist, advise or encourage any person to engage in any conduct that the trustees know, or ought to know, is illegal or dishonest, in respect of the bankruptcy and insolvency process.

Rule 39:

Trustees shall be honest and impartial and shall provide to interested parties full and accurate information as required by the Act with respect to the professional engagements of the trustees.