“Be cautious with government officials for they only befriend you in their own interest; they act like friends when it suits them, but do not stand up for you when you need them.”1
Insolvency trustees are officials of the bankruptcy court. They are, in effect, like government officials. They are forbidden by law against favouring the interests of a debtor over that of his or her creditors. “The trustee has a dual role: The trustee is a representative of both the debtor and the creditors. In short, the trustee in bankruptcy acts in a conflict of interest situation.” (Bennett on Bankruptcy 12th edition, pages 68 and 69) But it gets even worse. The more money that the insolvency trustee collects for the creditor, say Revenue Canada, the more he or she gets paid. A final danger is that, once you sign up with a trustee, you cannot back out.
As tax lawyers, we do not have any conflict of interest and always work for the benefit of our tax debtor clients. Before visiting an insolvency trustee, we engage in planning to ascertain if the financial obligations of debtors can be legally compromised or restructured in order to avoid bankruptcy. Part of our tax debt resolution team consists of a retired trustee who is no longer an official of the Bankruptcy Court and brings over 40 years of his experience to the planning sessions which, together with our 50 plus years of tax debt resolution experience, gives you the best possible plan. Only once you, the client, are satisfied with the strategy is the insolvency trustee who is to act engaged and instructed. Thereafter, we follow you through the process and are there for you when required to protect you to the maximum allowed by law.
By Brigitte DioGuardi, B.A., LL.B. and Paul DioGuardi, Q.C.
1 Ninth Tractate Avot (Wisdom of the Fathers) The Talmud