Each year thousands of students choose to study accounting as with dreams of working in multinational or large accounting firms. Few of them are attracted to the trustee profession, but a little known profession increasingly in demand in the Quebec market.
Quebecers increasingly indebted
As we all know, the indebtedness of Quebec households is rising and it’s not soon that this trend will reverse. Since 1999, the indebtedness of Quebecers rose 110% to 150% of their disposable income.
However, the increase in debt in itself is not a cause for alarm. If an individual incurs debt to increase its assets (such as buying a house), its financial situation is not necessarily in a bad way. By cons, if the debts are linked to consumption or assets that lose value ( automobiles, boats, etc.), debt becomes harmful. This is particularly the case of credit card debt.
Being insolvent means not being able to meet its payment obligations on its debt. When this happens to a consumer or a business, it can consult a trustee who will advise on the best procedures to undertake.
It is in this context that in 2013, Canada 118 678 4281 consumers and businesses have open records of insolvencies (bankruptcies and consumer proposals) among trustees. An increase of more than 20% over 10 years.
What is the source of this increase in insolvencies in Canada? One, access to credit is facilitated constantly, especially with the flooding of the market by credit cards. Two, in recent years, Canada and Quebec have experienced a sharp increase in consumer proposals. In figures, Quebec experienced a 27.8% increase consumer proposals in 2013 compared with the previous year. It is observed that more and more Quebecers opt for this alternative to personal bankruptcy to solve their debt problems.
The role of the trustee in bankruptcy
Wrongly, it is often believed that the role of the trustee is limited to liquidate the assets of failed. In fact, the liquidation of assets is only a small part of the work of the trustee. As in several insolvency cases the liquidation of assets is not required. This is particularly true where the bankrupt has only basic goods and has no equity in a property.
The main role of the trustee is to evaluate the situation of an insolvent person and then advise the best solutions screw screw to reduce or eliminate debt. Each case is unique and that is why the trustee shall use his knowledge in accounting, law and insolvency experience to offer an adequate solution.
The solution chosen by the insolvent person must be fair to all creditors. It is the responsibility of the trustee to ensure that all creditors receive their fair share of money realized in the folder. This is to ensure that no review-able transaction has taken place; that is to say a transaction that would favor one creditors over others, or a favor to the near bankrupt. An example of a review-able transaction could be the sale of his house at low prices relative. Or it could be a large payment to a creditor family member before insolvency. The creditors and trust to the trustee to administer the case with professionalism, honesty and objectivity.
More than accounting