Helpful Terms

“Bank” means

 

(a)    every bank and every authorized foreign bank within the meaning of section 2 of the Bank Act,

(b)   every other member of the Canadian Payments Association established by the Canadian Payments Act, and

(c)    every local cooperative credit society, as defined in subsection 2(1) of the Act referred to in paragraph (b), that is a member of a central cooperative credit society, as defined in that subsection, that is a member of the Association;

 

"Bankrupt" means a person who has made an assignment or against whom a bankruptcy order has been made or the legal status of that person;

 

“Bankruptcy Court” This is a court in which a judge or registrar will decide on the bankrupt's application for discharge and other insolvency matters;

 

“Chartered Insolvency and Restructuring Practitioner (CIRP)” A Chartered Insolvency and Restructuring Practitioner is a professional who has studied and articled in the area of Insolvency. Upon completing rigorous education in the area of Bankruptcy, proposals, liquidations, receiverships, agency appointments, corporate restructuring and various laws as they relate to Insolvency, like the Family Law Act, Business Corporations Act, Company Creditors Arrangement Act, and The Bank Act, is given the professional qualification;
 

"Claim provable in bankruptcy", "provable claim" or "claim provable" includes any claim or liability provable in proceedings under this Act by a creditor;

 

"Common-law partner", in relation to an individual, means a person who is cohabiting with the individual in a conjugal relationship, having so cohabited for a period of at least one year;

 

"Common-law partnership" means the relationship between two persons who are common-law partners of each other;

 

"Corporation" means a company or legal person that is incorporated by or under an Act of Parliament or of the legislature of a province, an incorporated company, wherever incorporated, that is authorized to carry on business in Canada or has an office or property in Canada or an income trust, but does not include banks, authorized foreign banks within the meaning of section 2 of the Bank Act, insurance companies, trust companies, loan companies or railway companies;

 

“Co-signers” Your bankruptcy does not cancel the responsibility of anyone that has guaranteed or co-signed a loan on your behalf. For example, if your sister co-signed a loan for you, that sister would be liable to pay the loan in full even if you decide to file for bankruptcy;

 

“Creditor” means a person having a claim provable as a claim under this Act;

 

“Current Assets” means cash, cash equivalents – including negotiable instruments and demand deposits – inventory or accounts receivable, or the proceeds from any dealing with those assets;

 

“Date of the Bankruptcy”, in respect of a person, means the date of

 

(a)    the granting of a bankruptcy order against the person,

(b)   the filing of an assignment in respect of the person, or

(c)    the event that causes an assignment by the person to be deemed;

 

“Date of the initial bankruptcy event”, in respect of a person, means the earliest of the day on which any one of the following is made, filed or commenced, as the case may be:

 

(a)    an assignment by or in respect of the person,

(b)   a proposal by or in respect of the person,

(c)    a notice of intention by the person,

(d)   the first application for a bankruptcy order against the person, in any case        

(i)    referred to in paragraph 50.4(8)(a) or 57(a) or subsection 61(2), or

(ii)  in which a notice of intention to make a proposal has been filed under section 50.4 or a proposal has been filed under section 62 in respect of the person and the person files a assignment before the court has approved the proposal;

(e)    the application in respect of which a bankrupt order is made, in the case of an application other than one referred to in paragraph (d); or

(f) proceedings under the Companies’ Creditors Arrangement Act;

 

“Debtor” includes an insolvent person and any person who, at the time an act of bankruptcy was committed by him, resided or carried on business in Canada and, where the context requires, includes a bankrupt;

 

“Director” in respect of a corporation other than an income trust, means a person occupying the position of director by whatever name called and, in the case of an income trust, a person occupying the position of trustee by whatever name called;

 

“Eligible financial contract” means an agreement of a prescribed kind;

 

“Equity claim” mean a claim that is in respect of an equity interest including a claim for, among others,

(a)    a dividend or similar payment,

(b)   a return of capital,

(c)    a redemption or retraction obligation,

(d)   a monetary loss resulting from the ownership, purchase or sale of an equity interest or from the rescission, or, in Quebec, the annulment, of a purchase or sale of an equity interest, or

(e)    contribution or indemnity in respect of a claim referred to in any of paragraphs (a) to (d);

 

“Equity interest” means

 

(a)    in the case of a corporation other than an income trust, a share in the corporation or a warrant or option or another right to acquire a share in the corporation other than on that is derived from a convertible debt, and

(b)   in the case of an income trust, a unit in the income trust – or a warrant or option or another right to acquire a unit in the income trust – other than one that is derived from a convertible debt;

 

“Executing officer” includes a sheriff, a bailiff and any officer charged with the execution of a writ or other process under this Act or any other Act or proceeding with respect to any property of a debtor;

 

“Financial collateral” means any of the following that is subject to an interest or in the Province of Quebec a right that secures payment or performance of an obligation in respect of an eligible financial contract or that is subject to a title transfer credit support agreement:

 

(a)    cash or cash equivalents, including negotiable instruments and demand deposits,

(b)   securities, a securities account, a securities entitlement or a right to acquire securities, or

(c)    a future agreement or a futures account;

 

“Insolvent person” means a person who is not bankrupt and who resides, carries on business or has property in Canada, whose liabilities to creditors provable as claims under this Act amount to one thousand dollars, and

 

(a)    who is for any reason unable to meet his obligations as they generally become due,

(b)   who has ceased paying his current obligations in the ordinary course of business as they generally become due, or

(c)    the aggregate of whose property is not, at a fair valuation, sufficient , or, if disposed of at a fairly conducted sale under legal process, would not be sufficient to enable payment of all his obligations, due and accruing due;

 

“Inspector” Inspectors are appointed by creditors to represent them before the trustee during the administration of proposals and bankruptcies. They are expected to assist the trustee by virtue of their experience and are required to supervise certain aspects of the trustee's administration;

 

“Income Tax Returns” Two income tax returns must be completed for the calendar year in which you become bankrupt. The pre-bankruptcy return covers the period from the beginning of the year to date of your bankruptcy. You will be required to provide your trustee with details and documentation to support this return. The post-bankruptcy return covers the period from the date of bankruptcy until the end of the calendar year;

 

“Legal counsel” means any person qualified, in accordance with laws of a province, to give legal advice;

 

“Locality of debtor” means the principal place

 

(a)    where the debtor has carried on business during the year immediately preceding the date of the initial bankrupt event,

(b)   where the debtor has resided during the year immediately preceding the date of the initial bankruptcy event, or

(c)    in cases not coming within paragraph (a) or (b), where the greater portion of the property of the debtor is situated;

 

“Mediation” Mediation is a way of resolving conflict between two or more individuals. In the course of a bankruptcy, the parties involved in a disagreement can agree to work with an impartial and independent person, called a "mediator', who will help them settle their dispute instead of going to court;

In bankruptcies mediation is available to resolve two types of disputes: i) disagreements over the amount of money the bankrupt will pay to the trustee for the benefit of the creditors during the bankruptcy (called surplus income); and ii) disagreements regarding the conditions that the trustee has recommended for a bankrupt's discharge;

 

 “Payments and Surplus Income” Immediately after becoming bankrupt, you are no longer required making payments to your creditors;

If you do not agree with the amount set by the trustee for your monthly payment of surplus income, the trustee must request mediation. If mediation does not resolve the disagreement, the trustee, under certain circumstances, will have to apply to court to have the matter decided;

Failure to make the required payments may affect your discharge;

 

“Person” includes a partnership, an unincorporated association, a corporation, a cooperative society or a cooperative organization, the successors of a partnership, of an association, of a corporation, of a society or of an organization and the heirs, executors, liquidators of the succession, administrators or other legal representatives of a person;

 

“Property” means any type of property, whether situated in Canada or elsewhere, and included money, goods, things in action, land and every description of property, whether real or personal, legal or equitable, as well as obligations, easements and every description of estate, interest and profit, present or future, vested or contingent, in, arising out of or incident to property;

 

"Proposal” means

 

(a)    in any provision of Division I or Part III, a proposal made under that Division, and

(b)   in any other provision, a proposal made under Division I of Part III or a consumer proposal made under Division II of Part III

 

and includes a proposal or consumer proposal, as the case may be, for a composition, for an extension of time or for a scheme or arrangement;

 

"Public utility” included a person or body who supplies fuel, water or electricity, or supplies telecommunications, garbage collection, pollution control or postal services;

 

 

“Resolution” or “ordinary resolution” means a resolution carried in the manner provided by section 115;

 

“Secured creditor” means a person holding a mortgage, hypothec, pledge, charge or lien on or against the property of the debtor or any part that property as security for a debt due or accruing due to the person form the debtor, or a person whose claim is based on, or secured by, a negotiable instrument held as collateral security and on which the debtor is only indirectly or secondarily liable, and includes

 

(a)    a person who has a right of retention or a prior claim constituting a real right within the meaning of the Civil Code of Quebec or any other statue of the Province of Quebec, on or against the property of the debtor or any part of that property, or

(b)   any of

a.       the vendor of any property sold to the debtor under a conditional or instalment sale,

b.      the purchaser of any property form the debtor subject to a right of redemption, or

c.       the trustee of a trust constituted by the debtor to secure the performance of an obligation,

 

if the exercise of the person’s tights is subject to the provisions of Book Six of the Civil Code of Quebec entitled prior Claims and Hypothecs that deal with the exercise of hypothecary rights;

 

“Special rights” means a resolution decided by a majority in number and three fourths in value of the creditors with proven claims present, personally or by proxy, at a meeting of creditors and voting on the resolution;

 

“Superintendent” means the Superintendent of Bankruptcy appointed under subsection 5(1);

 

“Transfer at undervalue” means a disposition of property or provision of services for which no consideration is received by the debtor or for which the consideration received by the debtor is conspicuously less than the fair market value of the consideration given by the debtor;

 

“Trustee in Bankruptcy” A trustee in bankruptcy is a person licensed by the Superintendent of Bankruptcy to administer proposals and bankruptcies. The trustee represents your creditors and is an officer of the court. However, the trustee can give you information and advice about both the proposal and bankruptcy processes and make sure that your rights, as well as those of the creditors, are respected;

 

“Windfalls” You must give all windfalls, such as lottery winnings and inheritances, occurring during the period of bankruptcy, to the trustee for distribution to your creditors.