Please note that the information provided herein is not legal advice and is provided for informational and educational purposes only. If you need legal advice with respect to bankruptcy matters, you should seek professional assistance (e.g. make a post on Dynamic Lawyers). We have bankruptcy law lawyers in Toronto, Ottawa, Hamilton, Mississauga, and Ontario registered on Dynamic Lawyers who can offer information, advice, and assistance with respect to bankruptcy matters.

So the question routinely comes up: what if I have started a lawsuit or want to start a lawsuit but then go bankrupt in Canada?

Well, if you turn to s. 71 of the Canada Bankruptcy and Insolvency Act, you’ll see that, when someone becomes bankrupt, they “cease to have any capacity to dispose of or otherwise deal with their property”. Rather, such capacity immediately passes to and vests in the Trustee responsible for the bankrupt’s estate. Furthermore, s. 72 provides that the Trustee is entitled “to avail himself of all rights and remedies provided by that law or statute as supplementary to and in addition to the rights and remedies provided by this Act“.

So what does this mean exactly?  Well, it’s basically saying that a bankrupt loses their rights to commence or maintain lawsuits dealing with their property.  So what does property mean?  Well, according to s. 2 of the Act, “property”:

“means any type of property, whether situated in Canada or elsewhere, and includes 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”

Wow! So property includes personal rights (which is enforceable against a person or definite class of persons and property rights (which can be enforceable in respect of a thing and an indefinite class of persons).  It does not include everything, however: the right to sue in tort for pain and suffering, for example, is not covered.

So at the end of the day, a bankrupt generally losses his or her ability to start or maintain a lawsuit that involves their economic rights.

written by admin \\ tags: bankruptcy and insolvency act, bankruptcy law, bankruptcy matters, canada bankruptcy, Dynamic Lawyers, lawyers in Toronto

Dynamic Lawyers is looking for a Kitchener bankruptcy/Insolvency lawyer to respond to the following public post (and hopefully get a new client):

I owned a small business and accountants’ advice was to “walk away”, so the assets were taken by the bank. The business is incorporated. I owe CRA, GST, PST, WSIB among other…but was unable to pay or sell business. I did everything I could. I filed for personal bankruptcy.Now I need to know whether I have to pay the government or my staff their wages owed. I own very little…my car and my house are not paid for…and I have no money.What is the next step? The Ministry of Labour has just sent me claims.

This person has indicated that their budget is $2,000.

To view the full public post, just click here.

If you are a Kitchener bankruptcy/insolvency lawyer or know of an Kitchener bankruptcy/insolvency lawyer who can deal with these issues, I’d encourage you to register on Dynamic Lawyers (only $50/month for the first year) by going here.

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So I’ve returned from Cuba and Parastou and I had a fantastic time (as we always do).  Since I’ve been gone, we’ve had a lot of new posts come in to Dynamic Lawyers and I’ve been playing catch up.  Here’s the latest public post, wherein someone is searching for a Toronto corporate lawyer to help them with their corporate dissolution:

Myself and a partner own a corporation (less than one year) to which I have been completing the bulk of the work. I would like to dissolve the partnership, however not sure what needs to be done and whether buying her out and keeping the corporation would be an option or to just dissolve the entire corporation and have myself start from scratch. The nature of the business is software programming and we both have invested time and money.

If you would like to see the full post, click here.

If you are or know a Toronto Corporate lawyer, then I would encourage you to register on Dynamic Lawyers as a lawyer (the fee is a modest $50/month for 1 year) to respond to this and other posts as they come in.  As always, future posts matching your City (e.g. Toronto), Legal Area (e.g. Business) , and Matter (e.g. Partner/Shareholder Dispute) will be automatically emailed to you.

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Please note that the information provided herein is not legal advice and is provided for informational and educational purposes only.  If you need legal advice with respect to child or spousal support, you should seek professional assistance (e.g. make a post on Dynamic Lawyers).  We have family law lawyers in Toronto and Ottawa registered on Dynamic Lawyers who can offer information, advice, and assistance with respect to your child or spousal support matters.

The following question often arises in the family law context: how, if at all, will my child or spousal support obligations be impacted or affected by me going bankrupt?    I would go about shedding some light on the issue in the following manner:

• “Bankruptcy” is a formal legal status under the Federal Bankruptcy and Insolvency Act ["BIA"].
• A debtor remains in bankruptcy until his or her discharge.
• The BIA contains numerous provisions which deal with the bankrupt’s child and spousal support obligations.
• Immediately upon the bankruptcy of the debtor, all proceedings by unsecured creditors against the bankrupt are halted (to prevent some creditors from having an advantage over others and to prevent multiple court proceedings and depletion of the bankrupt estate assets).
• Except with the permission of the bankruptcy court, no creditor may commence or continue any law suit, execution, garnishment, or other proceeding against the debtor [ss. 69.3 and 69.4 of the BIA]. This is referred to as a “stay of proceedings”.
• This stay applies only to “provable” claims [defined in s. 121 of the BIA] which arose before the date of the bankruptcy. “Non provable” claims may proceed outside of the bankruptcy proceedings.
• This stay does not apply to “provable” claims for child or spousal support [s. 69.41 of the BIA]. This means that child and spousal support claims may be prosecuted in a matrimonial court against the bankrupt, without permission from a bankruptcy court, while the debtor spouse is an un-discharged bankrupt and even afterwards.
• Child and spousal support claims may proceed only against assets which have not vested in the trustee and which are not amounts payable to the trustee [ss. 69.41(2), 121(4), and 68].
• Bankruptcy does not prevent the matrimonial court from dealing with support arrears and ongoing payments.
• Bankruptcy may have an impact on both the amount and enforcement of support orders.

So child or spousal support obligations are not released or extinguished during or after coming out of bankruptcy.  Going bankrupt will, however, have an impact on issues of enforcement, quantum, and availability of assets to pay for those child or spousal support obligations.

For more information about the relationship of bankruptcy and child/spousal support obligations, go to Dynamic Lawyers and make a post.  We have family law lawyers in Toronto and Ottawa registered who can help answer your questions and concerns and represent you in resolving such family law matters.

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This is not legal advice.  This information is being provided for educational purposes only.  If you require a lawyer, you should seek professional help (e.g. by making a post on Dynamic Lawyers).

The Globe and Mail recently reported on the boom within the bust (i.e. the boom of bankruptcy and insolvency lawyers and work during these poor economic times).  As such, I thought I’d take some time to provide some information concerning bankruptcies generally – such as how does one go bankrupt, what does it mean to go bankrupt, and how is the bankruptcy administered?

How to go bankrupt
A person (which includes an individual or a corporation) may become bankrupt in one of three ways: (1) voluntarily (by making an assignment in bankruptcy), (2) involuntarily (by being petitioned into bankruptcy by one or more creditors), or (3) through a failed commercial proposal.

What does it mean to go bankrupt?
Bankruptcy is a formal legal status under the Canada Bankruptcy and Insolvency Act [“BIA”]. A debtor remains in bankruptcy until his or her discharge. Immediately upon the bankruptcy of the debtor, all proceedings by unsecured creditors against the bankrupt are halted. This is intended to prevent any creditor from obtaining an advantage or preference against the general body of creditors as represented by the trustee, and to avoid the trustee from having to dissipate the assets of the estate through defence of multiple legal proceedings in different forums.

Except with the permission of the bankruptcy court, no creditor may commence or continue any law suit, execution, garnishment, or other proceeding against the debtor [ss. 69.3 and 69.4 of the BIA]. This is referred to as a “stay of proceedings”. Bankruptcy does not stop or stay criminal investigations or matters; secured creditors can also enforce their security against the bankrupt. They do not need the court’s permission for repossessing their collateral after bankruptcy.

Bankruptcy is not a clearing house for all debts that the debtor has incurred. Once the debtor obtains an order of discharge, the order operates to discharge the debtor from all claims provable in the bankruptcy, except for certain types of claims (such as debts arising out of fraudulent misrepresentation).

Bankruptcy Administration
The BIA is administered by trustees in bankruptcy, as well as by the Superintendent of Bankruptcy, Official Receivers, and Registrars and Judges of the Bankruptcy Court. The trustee in bankruptcy is an individual person or corporation that is licensed by the Superintendent of Bankruptcy under the Department of Industry of the Federal government of Canada to carry on the bankruptcy administration of liquidating a debtor’s assets, and then making the distribution to the creditors.  The trustee who assists the debtor through this cleansing process. The trustee in bankruptcy acquires title to the bankrupt’s property, administers the estate, communicates with creditors, reports to the Superintendent and to the Court, and pays out dividends. The trustee has a dual responsibility as both the bankrupt’s representative and as the representative of all the general creditors to the extent that he or she can act on their behalf against the bankrupt. The bankrupt chooses the trustee, normally pays for his or her services, and invariably meets with the trustee on several occasions before creditors enter the bankruptcy process.

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