Bankruptcy Info
The Bankruptcy and Insolvency Act
Should you decide to make a consumer proposal or declare bankruptcy, the Bankruptcy and Insolvency Act requires that counselling be provided to you. This counselling must be given by a counsellor registered with the Office of the Superintendent of Bankruptcy. Counselling consists of two stages. During the first counselling stage, you will be provided with information concerning money management, spending and shopping habits, warning signs of financial difficulties, and obtaining and using credit. In the second stage, the counsellor will help you to discover and understand the causes of your insolvency or bankruptcy and will assist you in establishing a rehabilitation plan by helping you to develop recommendations and alternatives for a financial plan of action. You must attend these two stages. Counselling may also be provided to someone who is related to you or has a financial relationship with you. If you feel that you need additional help or assistance, you may ask for a third counselling session.
The Canadian Bankruptcy and Insolvency Act is "An Act Respecting Bankruptcy and Insolvency" that sets out the law as it regards to bankruptcy in Canada under federal law, and is applicable to both businesses and individuals. The legislation includes the duties and powers of the Office of the Superintendent of Bankruptcy, a federal agency responsible for ensuring that bankruptcies are administered in a fair and orderly manner. The Bankruptcy and Insolvency Act is a federal statue that is uniformly applicable throughout Canada. Its purpose is not only to preserve as many of the debtor's assets as possible for the benefit for the creditors, but also to rehabilitate such debtors by forgiving the unpaid debt, thus removing an insurmountable burden and restoring them as productive members of society. Significant amendments have recently been made to introduce a further objective to help viable businesses survive restructuring and to facilitate consumers in making arrangements with creditors and thus avoid actual bankruptcy. Other important amendments are anticipated. It should be noted that the Bankruptcy and Insolvency Act does not apply to banks, insurance companies, trust companies, loan companies, and railways. It should also be noted that farmers and fishers cannot be forced into bankruptcy, but they can make a voluntary assignment.
To view the full document detailing the Bankruptcy and Insolvency Act, visit http://laws.justice.gc.ca/en/B-3/.
