What’s in a name?

The question “What’s in a name” got full coverage from Shakespeare when Juliet asked Romeo the mighty question in 1595. I don’t think anyone anticipated that 400 plus years later trustees in bankruptcy in Canada would be asking the same question.

They’ve been calling themselves trustees in bankruptcy for decades, but for some reason, some of the trustees want to call themselves something else. This begs the question, why?

In British Columbia some trustees have been calling themselves credit counsellors when they are not licensed to be credit counsellors. Why would a well-trained professional group like trustees in bankruptcy with a highly respected designation want to usurp some other group’s professional credentials? Especially a credit counsellor?

That is the rub Shakespeare’s Hamlet might ask. Could the answer be given by Bassanio in the Merchant of Venice, “To unburden all my plots and purposes….”
Could it be to outcompete the competition? Has the bankruptcy profession, officers of the provincial Supreme Court, fallen from the mountain of exclusion and privilege – endowed with special statutory powers no others have – down to the murky trenches of competition to conduct dog eat dog warfare with a group of credit counsellors who have absolutely no special statutory powers? Why else would a trustee in bankruptcy want to call themselves a credit counsellor?
What’s in a name you might ask? Business. More and more insolvent consumers. Let’s call ourselves credit counsellors some trustees openly advertise. That way we can make more money.
Oh, by the way. Many of the trustees say they only deal with the not-for-profit credit counselling agencies while they are very aggressive for-profit corporate entities. Does that not sound just a wee bit hypocritical?
Problem number 1. A trustee in bankruptcy is not neutral like a counsellor should be. Trustees in bankruptcy have a legal obligation to act on behalf of creditors – to seize exigible assets from the debtor and distribute the proceeds for the benefit of the unsecured creditors. Since 1992, surplus income has become an additional exigible asset for trustees to extract from insolvent consumer debtors in a bankruptcy.
The original intention of bankruptcy legislation was to have a legal process to wind up insolvent companies/corporations in a timely fashion, stop all litigation between debtors and creditors and discharge both debtors and creditors from impossible debt problems.

And this principle is still in effect. The only difference today from the past is the astronomical rise of consumer bankruptcies involving individuals and families since the 1990s. All of the consumer debtor’s property (exigible assets) automatically vests in the trustee upon a bankruptcy filing. The Bankruptcy and Insolvency Act provides a statutory framework to wind up the debtor’s estate and gives legal authority and a process for the trustee to follow which includes winding up the tax year, organizing and obtaining all creditor claims, conducting meetings of creditors where required, resolving disputes, appraising the debtor’s conduct or misconduct and making recommendations to the court regarding the discharge. The role is primarily administrative.

My question. What’s wrong with a bankruptcy trustee being a bankruptcy trustee? Is that not an honourable – and profitable enterprise?

Bankruptcy plays an essential role in Canada’s social justice framework. Hundreds of thousands of individuals and families have needed it for all kinds of legitimate reasons. Why is it necessary for them to change their names to remove the title of trustee in bankruptcy and call themselves something else?

Now. Not all trustees in bankruptcy call themselves credit counsellors. But, there is a serious proposal being tabled at the Office of the Superintendent of Bankruptcy to change their name to Licensed Insolvency and Restructuring Practitioners.

Of course, changing their name does not change who they are. You are still a Montague or a Capulet. However, having been a successful private for profit credit counsellor since the 1990s, I can openly say there is nothing wrong or bad about being a trustee in bankruptcy. The stigma of bankruptcy has long since vanished as creditors have entered the credit counselling field themselves through not-for-profit credit counselling agencies. Perhaps it is this kind of stiff competition the trustees in bankruptcy are worried about.

I’ve been struggling too. The challenge for me is to be better. To provide an outstanding service. And to keep getting better. To keep changing. As Charles Darwin said, “It is not the strongest of the species that survives nor the most intelligent; it is the most adaptable.”

From my perspective, the trustees in bankruptcy have all of the advantages. They have the power to consolidate creditors in Consumer Proposals and the power to help honest but overburdened consumers discharge impossible debt problems and for individuals and families to have a second chance in life. What could be nobler than that in a credit society with so many credit causalities?

Credit counsellors have the opportunity to get to individuals and families with credit and money issues before they need legal remedies or legal action like Consumer Proposals or Bankruptcy. Credit counsellors should be neutral and sometimes advocate for the debtor. Trustees in bankruptcy should be trustees in bankruptcy.

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