Directive No. 11 (Pre-1992)

Bankruptcy assistance program

1. Section 49 of the Bankruptcy Act allows an insolvent person to make an assignment of his property.
   
   
2. Section 2 of the Bankruptcy Act defines an insolvent person as one having one thousand dollars in provable debt as well as:
   
   
   1. being unable to meet his obligations as they generally become due, or
      
      
   2. having ceased to pay his current obligations, or
      
      
   3. the aggregate of his property not being sufficient to pay all his obligations if disposed of by sale.
      
      
3. Sub-section 14(6) states that no trustee is bound to assume the duties of trustee in matters relating to assignments, receiving orders or proposals.
   
   
4. Due to circumstances sometimes beyond their control, some overburdened debtors are unable to demonstrate to a trustee that sufficient funds will be available in the estate to cover administration costs.
   
   
5. As a result, insolvent debtors desirous of utilizing the relief that is available to them by the Bankruptcy Act, are unable to secure services of a trustee to administer their bankruptcy.
   
   
6. The purpose of this directive is to outline a program that will provide access to the bankruptcy process within the private sector for debtors requiring the necessary services of a bankruptcy trustee and to outline the procedure and requirements of such a program.
   
   

7. A debtor initially contacting the Office of the Superintendent of Bankruptcy for advice relative to his financial affairs will be provided with a list of trustees participating in the Bankruptcy Assistance Program.
   
   
8. If unable to obtain the services of a trustee after consulting at least two (2) participating trustees, or the sole trustee in the area where there is only one participating trustee, the debtor may again contact the Office of the Superintendent of Bankruptcy if he considers that bankruptcy remains the solution to his problems. At such time, a registration form, detailing the debtor's name, address, telephone number and the name(s) of trustee(s) previously contacted will be prepared.
   
   
9. The Administrator will deliver the registration form to a participating trustee who becomes the designated trustee on a rotational basis as determined by the Administrator.
   
   
10. The debtor will contact the trustee designated by the Administrator to fully discuss the alternatives and the resulting consequences that a decision to go bankrupt or make a proposal would involve.
    
    
11. Providing that the debtor is eligible for the program pursuant to paragraphs 17 and 18 below and decides to declare bankruptcy, the designated trustee will prepare the necessary documentation for the filing of the assignment.
    
    
12. If the debtor does not attend at the trustee's office or does not proceed with an assignment, after the interview, the designated trustee will return the registration form indicating the reasons for the non-assignment to the local Office of the Superintendent of Bankruptcy.
    
    
13. If the assignment is not filed within 30 days of the initial interview with the debtor, the trustee is obliged to report to the Administrator. In remote geographical areas, a slightly longer period of time would be acceptable.
    
    
14. Trustees must be available for service throughout the entire year and agree to ensure that files accepted under this program will receive the same level of service as similar files accepted outside of the program.
    
    
15. The application for a bankrupt's discharge is not to be delayed due to the lack of full payment of a trustee's fee.
    
    
16. In cases where third party deposits or guarantees are taken by the trustee, such arrangements must be made in accordance with Directive No.5R.
    
    

17. All insolvent individuals wishing to make an assignment in bankruptcy and who contact the Office of the Superintendent of Bankruptcy, will be accepted into the Bankruptcy Assistance Program except individuals:
    
    
    1. who are incarcerated; or
       
       
    2. previously or currently involved in commercial activities where the administration of the bankruptcy could give rise to an appreciable amount of administrative or investigative work for the trustee.
       
       
18. In cases where a debtor's income is in excess of the amounts determined by the Superintendent's guidelines, the debtor is expected to provide voluntary payment to the estate. In those circumstances where the debtor, without valid reasons, refuses to abide by these guidelines, the trustee may refuse to grant the debtor's request for bankruptcy service.
    
    

19. A participating trustee, once designated, must agree to accept and process assigned eligible debtors except in those situations where the trustee will be in a conflict of interest. For the purpose of this Directive conflict of interest is defined in the Canadian Insolvency Association's Rules of Professional Conduct.
    
    
20. All trustees requesting to participate in the Bankruptcy Assistance Program will be eligible to do so subject to the following provisions:
    
    
    1. they fully agree to adhere to all the requirements of the Program;
       
       
    2. new trustees requesting to participate in the program will be added to the list of participating trustees every January 1st and July 1st;
       
       
    3. any trustee withdrawing from the program, either voluntarily or involuntarily, will not be permitted to return to the program for a period of two years from the withdrawal. Subsequent re-admittance into the program would be at the discretion of the Administrator; and
       
       
    4. should any trustee withdraw for an unusual reason (i.e. sickness), the Administrator would decide as to when the trustee would be admitted back into the program.
       
       
21. To prevent any possible benefit from a trustee's place in the alphabetical listing, periodic rearrangement of the trustee list will be made by the Office of the Superintendent of Bankruptcy.
    
    
22. Trustees participating in the program, subject to paragraph 23, shall be resident trustees unless bankruptcy service is otherwise unavailable in a particular area.
    
    
23. Only one name for each trustee office will be permitted in the alphabetical listing. A non-resident trustee with an advertising exemption will be considered a resident trustee.
    
    
24. Trustees not complying with the spirit or conditions of this Program may see their name deleted from the list of participating trustees by the Superintendent.