Insolvency Counselling! Where Is It At?

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1 Insolvency Counselling! Where Is It At? Presenters: André Bolduc, BDO Canada Limited Daniel Charrette,Office of the Superintendent of Bankruptcy

2 Part 1: Accountability for Insolvency Counselling The new directive seems to emphasize the accountability of the LIT for provision of the insolvency counselling (Section 6, 9(e) Section 6, 9 (e) 6. An LIT is accountable for the provision of insolvency counselling to each individual bankrupt and consumer debtor on whose behalf he or she has filed an insolvency proceeding. The accountability of the LIT is the same regardless of whether they provide counselling, or provide for it. 9 (e) Ensure that their assigned BIA Insolvency Counsellor adheres equally to the high standards of ethics and professionalism that apply to the LIT, with regard to carrying out insolvency counselling functions with competence, honesty, integrity, impartiality and due care. Can you explain what has changed with respect to this particular point of accountability? It seems to that LITs were always responsible for the provision of the Counselling.

3 Part 2: Registration Registration is approaching fast (June 1st). We have recently received the registration package with all of the information but honestly I have not had a chance to read through it, I wonder if you could take us through it.

4 Are firms or individuals that operate as a non-profit or registered charity organization exempt from the ineligible activities requirements of Directive No. 1R4? If a credit counsellor works for or is associated with an organization that offers Debt Management Plans (DMP), are they ineligible to be registered as a BIA Insolvency Counsellor? Can I register an independent counsellor, who is not associated with any credit counselling organization, as a BIA Insolvency Counsellor? Can I register an individual as a BIA Insolvency Counsellor if they also work as a mortgage broker or a real estate agent? Can I register an individual as a BIA Insolvency Counsellor who has previously acted as an intermediary? Does counselling experience gained while working for an intermediary count towards the experience required to qualify for registration as a BIA Insolvency Counsellor under Directive 1R4? Before I request to register a third party individual against my licence as a BIA counsellor, how can I ensure they are not acting as a referral arranger?

5 Part 3:Transitional Measures (A) Education component: Section 12 specifies the education requirement for a counsellor. The transitional measures allow a LIT to register an individual who does not meet the requirement of Section 12 if this individual was registered as an Insolvency Counsellor with the OSB at the date of issuance of the directive and has five years of related work experience. Paragraph 12 and paragraph 38 Paragraph 12 Paragraph 38 In accordance with the OSB registration process, and subject to the OSB s review, the registering LIT shall demonstrate and attest that the individual to be registered against the individual LIT s licence meets the following requirements: Education (a) has successfully completed either a high school diploma or high school equivalency certificate (having passed the General Educational Development (GED) test), plus one of: (i) a minimum of three (3) years of relevant practical work experience supporting an LIT or registered BIA Insolvency Counsellor; or, (ii) a minimum of thirty (30) credit hours of post-secondary study completed in a diploma or degree program from a recognized post secondary institution; Education Requirement In registering an individual against their licence pursuant to paragraph 10 of this Directive, and in lieu of the Education Requirement in paragraph 12(a) of this Directive, the LIT may attest and demonstrate that the individual: (a) was registered as an Insolvency Counsellor with the OSB at the date of issuance of this Directive; and, (b) has five (5) years of related work experience

6 Could you give us some examples of what the OSB considers related work experience? What kind of proof would you expect the LIT to keep on file with respect to the related work experience? One of my insolvency counsellors has been doing this for a very long time and is a very good and well liked insolvency counsellor. However, he is unable to find his high school diploma what can we do? (B) For individuals who were grandfathered into the insolvency counselling system in the mid 1990 s and who do not hold a ICQC certificate or have not successfully completed the PCIC and do not have a letter or certificate attesting that they were grandfathered in will they be grandfathered in and what needs to be done? I would like to register a previously registered individual who does not meet the amended education, knowledge and experience requirements in paragraph 12 of Directive No. 1R4. Will I need to submit a new registration for someone who has been previously registered with the OSB, prior to the Directive No. 1R4?

7 Part 4: Method of Giving the Counselling The new directive has been modernized when it comes to the different ways to provide for the counselling. The possibilities are: face to face / video conference / conference call. Who decides? Who can give this counselling? Where? Is it only at one of the LIT s offices? When is the decision on the method of providing the insolvency counselling made, and can it be changed? Please explain what a variance is!

8 Paragraph 19 and paragraph When providing insolvency counselling or assigning an individually- or corporately-registered BIA Insolvency Counsellor to provide insolvency counselling for a specific insolvency filing, the LIT shall: (a) meet with the individual bankrupt or consumer debtor to review and complete the Insolvency Counselling Disclosure and Assignment Form (Schedule I); (b) obtain written consent from the individual bankrupt or consumer debtor before disclosing any information concerning the individual bankrupt s or consumer debtor s insolvency to a BIA Insolvency Counsellor who is not an employee of the individual LIT or corporate LIT (Schedule I); (c) submit to the OSB, prior to the first counselling session, a copy of the Insolvency Counselling Disclosure and Assignment Form (Schedule I), signed by the individual bankrupt or consumer debtor and the LIT; and, (d) undertake to supervise any assigned BIA Insolvency Counsellor s delivery of insolvency counselling and validate and attest to its conformance with the process and standards as set out in this Directive. 2. To ensure a debtor s informed consent, an amended Insolvency Counselling Disclosure and Assignment Form (Schedule I) shall be submitted to the OSB where: (a) an LIT decides to reassign insolvency counselling from an employee of the LIT, or corporate LIT, to a thirdparty BIA Insolvency Counsellor (including an LIT outside the firm); or b) an LIT decides to change the insolvency counselling delivery method from that described under paragraph 20(1) of this Directive to a method described under either paragraph 20(2) or 21(1) of this Directive. 3. With the exception of paragraph 19(2) of this Directive, the LIT shall report any other changes in the provision of insolvency counselling at the conclusion of the process on the Insolvency Counselling Completion Form (Schedule II). Paragraph 23 Where extraordinary circumstances may prevent insolvency counselling from being performed in accordance with paragraphs 20(1) and (2) or 21(1) of this Directive, the LIT shall request to vary the delivery by completing and submitting to the OSB, via E-Filing, a Request for Variance Form (Schedule III).

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11 Types of counselling: (a) Face to face Paragraph (1) As the standard and preferred approach, an LIT shall provide, or provide for, the delivery of insolvency counselling in-person at the LIT s authorized office, where the LIT finalized the debtor s assessment. (2) Subject to paragraph 20(1) of this Directive, when an LIT provides for insolvency counselling using a third party, by exception, and for reasons of geographic proximity to a debtor, in- person insolvency counselling may be provided at the third-party office location of a registered BIA Insolvency Counsellor upon request of the individual bankrupt or consumer debtor, and if the LIT agrees it is feasible and appropriate.

12 (b) Conference call Is permission still required and what constitutes a valid reason? Will the OSB be more restrictive in allowing this method of giving the counselling? Who can give this counselling? Do we have to be in one of the LIT s offices?

13 (c) Videoconference (Paragraph 21 and 22) New method; What conditions are required to be met? Recording what kind of recording? Is quality an issue? Can we simply record it on our cellular phone? Does the debtor need to sign a specific document allowing the recording? Should we, as a measure of precaution, inform the debtor when the videoconference starts that it is being recorded. What is the proper response, when the debtor asks CAN THIS BE USED AGAINST ME?

14 (c) Videoconference - Paragraph 21 and 22 Paragraph 21 Paragraph 22 (1) By exception, and for reasons of avoiding significant debtor inconvenience, an individual bankrupt or consumer debtor may request that an LIT provide, or provide for in-person, insolvency counselling via videoconference. (2) In-person insolvency counselling by video is subject to the following additional conditions: (a) Both the LIT and the individual bankrupt or consumer debtor have the necessary means and capacity to participate and the LIT agrees it is feasible and appropriate; (b) The individual bankrupt or consumer debtor only receives insolvency counselling at a location that offers privacy and that is not an office of an individual who is ineligible to be registered against an LIT s licence pursuant to paragraph 13 of this Directive; (c) Insolvency counselling via videoconference is provided only on an individual basis and not on a group basis, nor in the presence of an individual who is ineligible to be registered against an LIT s licence pursuant to paragraph 13 of this Directive. Consistent with the debtor s agreement in the Insolvency Counselling Disclosure and Assignment Form (Schedule I), in the case of exceptions identified under paragraphs 20(2) and 21(1) of this Directive, the LIT shall ensure the quality and integrity of BIA insolvency counselling through the retention of an audio record of the counselling session for a temporary period. Audio records shall be retained and available for validation by the OSB on request, for a minimum period of forty-five (45) days following the counselling session. Records shall be kept in a secure location and securely destroyed on a regular basis following the expiry of the retention period.

15 (d) Third party insolvency counsellor (Paragraph 20 and 22) Where does the counselling need to take place? Who is responsible? What about other type of qualified counsellors? Once the new directive comes into force, will they still be allowed to provide insolvency counselling and what are the conditions that they must meet?

16 (d) Third party insolvency counsellor (Paragraph 20 and 22) Paragraph 20 (1) As the standard and preferred approach, an LIT shall provide, or provide for, the delivery of insolvency counselling in-person at the LIT s authorized office, where the LIT finalized the debtor s assessment. (2) Subject to paragraph 20(1) of this Directive, when an LIT provides for insolvency counselling using a third party, by exception, and for reasons of geographic proximity to a debtor, in-person insolvency counselling may be provided at the third-party office location of a registered BIA Insolvency Counsellor upon request of the individual bankrupt or consumer debtor, and if the LIT agrees it is feasible and appropriate. Paragraph 22 Consistent with the debtor s agreement in the Insolvency Counselling Disclosure and Assignment Form (Schedule I), in the case of exceptions identified under paragraphs 20(2) and 21(1) of this Directive, the LIT shall ensure the quality and integrity of BIA insolvency counselling through the retention of an audio record of the counselling session for a temporary period. Audio records shall be retained and available for validation by the OSB on request, for a minimum period of forty-five (45) days following the counselling session. Records shall be kept in a secure location and securely destroyed on a regular basis following the expiry of the retention period.

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