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2014-06-09 19:15:06

Mandatory Counselling Program Report

All insolvency filings in Canada are administered under the ­Bankruptcy and Insolvency Act. Bankruptcy Trustees are licensed and regulated professionals who do the actual administration, and they report directly to the Office of the Superintendent of Bankruptcy (OSB) Canada.  The BIA sets out the rules and procedures that Trustees and bankrupts must abide by. One of these rules is mandatory counselling.


Once a debtor assigns into bankruptcy they must attend a minimum of two mandatory counselling sessions over the term of their bankruptcy.  The mandatory counselling sessions are to assess where their financial difficulties came from and to develop coping strategies for better financial health and decision making in the future. The OSB states that the objective of mandatory counselling is to promote the rehabilitation of debtors and avoid repeat bankruptcies.


The OSB recently completed an investigation into whether relevance and effectiveness of the mandatory counselling program.  The full report is posted on the OSB website for public viewing.


Overall the report found that the mandatory counselling program is addressing a continuing need and is effective in helping debtors avoid future financial difficulties. The report also provided recommendations on how to improve the program and increase the success rate for debtor rehabilitation.  These include


  • Exploring ways to facilitate access to products and tools that would help in the delivery of the program
  • Collect data and explore the idea of creating a multi-option plan better tailored for different groups of debtors with different needs and financial problems.


In Response the OSB has committed to an action plan to take place over the next 2 years.