BANKRUPTCY AND INSOLVENCY ACT CANADA: BANKRUPTCY LAW FAQ BANKRUPTCY ACT CANADA
The purpose of this video is to list the 7 most frequently asked questions I am asked
about the Bankruptcy and Insolvency Act (Canada).
1.
Is there a book that explains the various topics and sections of the Act?
Yes there is.
The book is the Annotated Bankruptcy and Insolvency Act Canada.
It has the complete Act and its rules and regulations.
In addition, the annotations provide explanations on the application of each section as well
as listing of decided cases to support the explanations.
2.
Can I look up the Act and decided cases somewhere online for free?
Yes.
The Canadian Legal Information Institute (CanLII) operates a website.
It contains what it calls the Bankruptcy and Insolvency Act Canada CanLII.
CanLII can also be used to search bankruptcy legal decisions in both English and French.
3.
Where can I find a listing of the many forms that a licensed insolvency trustee uses?
The best place to find all of the Bankruptcy and Insolvency Act Canada forms is on the
website operated by the Government of Canada, Office of the Superintendent of Bankruptcy.
All the forms are listed.
They are also downloadable as Bankruptcy and Insolvency Act Canada pdf forms.
4.
Can I perform a Bankruptcy and Insolvency Act Canada search?
People ask me if they can perform a Bankruptcy and Insolvency Act Canada search.
What they really mean is can they perform a search to determine if a specific person
or company did a personal or corporate filing under the Canadian bankruptcy system.
The answer to this question is yes.
The Office of the Superintendent of Bankruptcy operates a database for people to search the
bankruptcy and insolvency records in Canada.
5.
What are the Bankruptcy and Insolvency Act Canada regulations?
The Bankruptcy and Insolvency Act Canada regulations, otherwise known as the bankruptcy rules, form
part of the Act itself.
The pure legislation contained in the various sections of the Act is just that; the legislation.
However, there are practical considerations which also need clarification.
Such clarification is found in the Rules contained in the Bankruptcy and Insolvency Act (Canada).
6.
Are all unsecured creditors treated equally in a personal or corporate bankruptcy?
The answer is both no and yes.
There are two types of unsecured creditors; preferred unsecured and ordinary unsecured.
All ordinary unsecured creditors ARE treated equally.
Their claims rank equally.
If there is a dividend to be paid by the licensed insolvency trustee to the ordinary unsecured
creditors, then they will all receive their pro rata share.
The preferred unsecured creditors ARE NOT treated equally.
Their treatment is found in the Bankruptcy and Insolvency Act Canada section 136.
This section sets out the scheme of distribution for the priority of claims.
Preferred creditors ALWAYS get paid BEFORE ORDINARY creditors, even though they both
are unsecured.
7.
In a personal bankruptcy, are there any claims not discharged upon the person receiving their
absolute discharge from bankruptcy?
Yes.
The list of claims not discharged in a person’s bankruptcy are listed in the Bankruptcy and
Insolvency Act Canada section 178.
Such debts are:
a fine, penalty, restitution order or other order similar in nature imposed by a court
in respect of an offence, or any debt arising out of a recognizance or bail;
any award of damages by a court in civil proceedings in respect of bodily harm intentionally inflicted,
sexual assault, or wrongful death as a result of such an act;
a debt or liability for alimony or support under a court order or valid written agreement;
the debt or liability arising out of fraud, embezzlement, misappropriation or defalcation
while acting in a fiduciary capacity; debts or liabilities resulting from obtaining
property or services by false pretences or fraudulent misrepresentation;
liability for the dividend that a creditor would have been entitled to receive on any
provable claim not disclosed to the trustee, unless the creditor had notice or knowledge
of the bankruptcy and failed to take reasonable action to prove a claim;
any debt or obligation of a loan made under the Canada Student Loans Act, the Canada Student
Financial Assistance Act or any enactment of a province that provides for loans or guarantees
of loans to students where the date the person ceased being a full or part-time student was
within seven years before the date of bankruptcy;
I hope you have a better understanding of the 7 most asked questions about the Government
of Canada Bankruptcy and Insolvency Act.
The Act deals with bankruptcy insolvency issues for bankruptcy law both personal and corporate.
If you have any questions about how the Canadian bankruptcy system works or feel that someone
you know could benefit from a free initial consultation with a professional licensed
insolvency trustee, feel free to contact the Ira
Smith Team.