Bromwich+Smith ⎯ Helping Canadians Rebuild Their Worth

Bromwich+Smith ⎯ Helping Canadians Rebuild Their Worth

Written by Caitlin Wood
Last Updated July 8, 2021

For consumers struggling with debt problems, Bromwich+Smith is a blessing. Their team, made up of Licensed Insolvency Trustees and Debt Relief Specialists, is dedicated to helping Canadian consumers take back control of their finances. 

We had the pleasure of interviewing VP of Insolvency and head Trustee Shawn Stack about all things consumer debt and how Bromwich+Smith stands out by putting their clients first. 

For those who are unfamiliar, can you explain what a Licensed Insolvency Trustee is and how they help Canadians struggling with debt?

A Licensed Insolvency Trustee (LIT) is a federally licensed Court Officer that assists both businesses and natural persons to restructure their debts. 

LITs were previously known as Bankruptcy Trustees because that was primarily the work that we did in the community. However, with the ever-increasing amount of consumer debt that was being carried, more and more Canadians began to become insolvent (unable to pay their debts) and wanted to avoid bankruptcy so the government created the option of filing a Consumer Proposal.

A Consumer Proposal is a forced settlement that is put on a natural person’s creditors, wherein the settlement binds the creditors with a settlement that offers them less than what is owed, but more than what they would receive in a bankruptcy scenario.

Since only a LIT can file a bankruptcy, and a consumer proposal must offer the creditors more than what they would get in a bankruptcy, only a LIT can file a Consumer Proposal. 

A LIT does not work for the creditors or for the debtor. The LIT works for the community, as a Court Officer. 

This nonpartisan role is to ensure that the interests of all parties are balanced. Anyone that is unhappy with the decision of the LIT can bring their concerns to the licensing body of LITs, The Office of the Superintendent of Bankruptcy, a division of the Federal Government, and/or the Court (as a LIT is an Officer of the Court).

LITs assist citizens to restructure and reduce their debt, as well as provide financial counselling. LITs are part of the community because we as a people recognize that the most important resource in society is our citizens and consumers, and when they are overburdened by debt the social fabric breaks down.  

Is there a difference between a debt relief specialist and a Licensed Insolvency Trustee?

Terrific question.

A Debt Relief Specialist is a role that is specific within Bromwich+Smith, and no other LIT in Canada is using this model. Why? Because we are client-centric and we invented it!

In Canada there are approximately 1,100 LITs; however, not all of them are practicing, and not all of them work in servicing natural persons as we do.

The traditional model of a LIT firm would be that the LIT would have a helper that was colloquially referred to as an administrator. This role would be responsible to interview people that contacted the LIT firm looking for information and help; reviewing claims submitted by creditors; reviewing correspondence from clients; preparing court reports; doing counselling; preparing taxes; essentially being responsible for all aspects of the client experience. They were essentially a jack-of-all-trades and master-of-none.

In an effort to provide a greater reverence to this extremely important role, LITs started to change the title of the administrator. It goes by various iterations: Junior Administrator; Senior Administrator; Estate Manager; Manager. No matter what the name given, the lack of specialty for different aspects of the role was never established. The service model never changed.

This meant that you could have someone that is terrific at doing paperwork, but not so great at communicating with people, meeting and interviewing clients. We have all experienced an exchange with a professional that is terrific at what they do, but their bedside manner is, so to speak, horrible. 

We at Bromwcih+Smith decided that our clients deserved better! We decided that we would create a role that was dedicated to that most important aspect of restructuring which takes place at the very beginning of the journey, the interview and the communication of the process. Our Debt Relief Specialists are hired, trained and continually supported and educated to provide unparalleled service respecting this interview and education process. They are masters at communication and problem-solving. 

When a consumer comes to Bromwich + Smith, what can they expect from their first meeting? Is there anything important they should be aware of?

They can expect to be treated as a unique individual with unique needs, and a unique story. They can expect to be asked nonjudgmental, but pointed questions about their debts, their assets, their income and their expenses.

To this end they should have a list of their creditors with the approximate amount owed; they should have a rough idea of where they are spending their money and how much money they bring in in a month (you can find this on your bank statements).

More importantly, however, they should be prepared and open to hearing the options that are available and to discuss the recommendation that we provide. This is really important. We are not about providing people with information only; we are about providing answers and solutions. If you are not ready to take action…that’s okay, but you should ask yourself, “What will make me ready to take action.” 

The most important thing that they should be aware of is that when you work with Bromwich+Smith your life changes. Tomorrow will not be like yesterday was. The first flower that blooms in spring is the sign that winter is over; we help people recover from their long winter of discontent and flourish in the new potential of the coming days of spring.

When working with a consumer with debt problems, what is your main goal? Do you help them create healthy financial habits and provide advice on how to deal with debt in the future?

Certainly, our goal is to provide information and education, but our main goal is to help people obtain courage, to take action, and bring about positive change in their world. 

When should a consumer consider speaking with a debt relief specialist or Licensed Insolvency Trustee?

That’s a terrific question.

When should someone go to a doctor?

Typically you see a doctor when you are concerned about your health. Many people wait too long after the symptoms manifest before they see a doctor, and this makes things significantly worse. If they would have seen the doctor earlier the issue could have been identified and remedied earlier and easier.

If someone is just able to make their minimum payments and are not reducing the principal balance, that is certainly a time to speak to a LIT.

If their income reduces they should speak with a LIT. This reduction could be due to a loss of a member of the family unit that was contributing to the household bills or a death, roommate or child moving out, separation/divorce. etc.

What types of debt can you help customers with?

Credit cards, income tax, lawyer bills, student loans. Any debt that is unsecured. If a debt is secured to an asset (a car loan or a home), we can assist by helping the person surrender the asset and restructure the shortfall through a consumer proposal or bankruptcy.

Why should a consumer struggling with debt issues choose to work with a Licensed Insolvency Trustee over other debt relief services?

There is a really horrible thing that has happened in the community in the last 15 years or so. There are companies that have started up and they pretend that they are LITs, and they say that they can assist folks to file a consumer proposal. What these companies do, however, is gather information, charge people a little money up front, and then bring these people to a LIT that they have a special relationship with to file the actual proposal. After the proposal is filed and the individual is protected by the LIT as an Officer of the Court, the company collects a further fee from the client to “represent them” through the process.

These companies are not law firms; in fact, they are completely unregulated. They have arrangements with specific LITs, and the Office of the Superintendent of Bankruptcy has huge concerns with both the business model that these companies use and the behaviour of the LITS that develop and support these relationships.

Someone should absolutely only use a LIT when looking at financial restructuring, but they should also ask that LIT if they have relationships with companies that refer people to them and continue to charge money – the ones that the Office of the Superintendent Bankruptcy are concerned about.

What is the most important thing you wish more Canadian consumers knew about managing their debt?

Bad situations can happen to the best of people. 

Sometimes when we find ourselves in a bad situation we look backwards and try to figure out how we ended up where we are. This can be a great strategy for learning, but it can also be a stultifying place of despair. 

We can and will help people understand how they ended up in the situation that they find themselves in, but we are more interested (at least in the beginning) to help people understand how they can get out of the oppressive situation and get to a better place.

We have the right to be redeemed and freed from the crushing burden of our debts.

Finally, 2020 has obviously been a difficult year for everyone. Have you noticed any changes in the way consumers are dealing with debt problems? 

It sure has been a difficult year for everyone.

The reality is that because of the pandemic people put their debt issues on the back burner and focused on the immediate issue of COVID-19. When you are in crisis it is right to prioritize that crisis, and I and the creditors understood and support this action.

The reality is, however, that now the creditors are coming forward and they are not willing to be on the back burner any longer; they are requiring and demanding that their needs be met. More and more Canadians are looking into the ability to file a consumer proposal to settle their debts, and more and more Canadians, with the help of Bromwich+Smith, are on the road to financial wellness.

Rating of 5/5 based on 4 votes.

Caitlin is a graduate of Dawson College and Concordia University and has been working in the personal finance industry for over eight years. She believes that education and knowledge are the two most important factors in the creation of healthy financial habits. She also believes that openly discussing money and credit, and the responsibilities that come with them can lead to better decisions and a greater sense of financial security. One of the main ways she’s built good financial habits is by budgeting and tracking her spending through the YNAB budgeting app. She also automates her savings so she never forgets to put aside a portion of her income into her TFSA. She believes investing and passive income is key to earning financial freedom. She also uses her Aeroplan TD credit card to collect Aeroplan points so that she can save money when she travels.

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