These definitions are provided solely for the purpose of facilitating the reader's understanding of the terms used on this website. They are general interpretations only and are not to be considered legal definitions. For specific information on your situation, please talk to a trustee or a lawyer.
Absolute Discharge
See
Discharge from Bankruptcy
.
Act of Bankruptcy ( Acte de faillite )
An act committed by a debtor as defined under the Bankruptcy and Insolvency
Act. One of the most common is if a debtor ceases to meet his liabilities
generally as they become due. A creditor with a provable claim of $1000 and
over may file a petition for a receiving order if the debtor has committed such
an
act within the six months preceding the filing of the petition.
Administrator ( Administrateur )
A person designated by the Superintendent of Bankruptcy, responsible for the
administration of a consumer proposal under the Bankruptcy and Insolvency
Act.
Affidavit ( Déclaration sous serment )
A voluntary written declaration of facts affirmed or sworn under oath before an
authorized officer such as a Notary Public or Commissioner of Oaths.
Arm's Length ( Sans lien de dépendance )
Describes dealings between two parties who, amongst other things, are not
related by blood or marriage and are presumed to have roughly equal bargaining
power.
Assets ( Éléments d'actif )
In the context of bankruptcy it means all the property of the debtor available
for distribution for the general benefit of creditors (available for paying
debts).
Assignment in Bankruptcy ( Cession de biens )
A voluntary assignment by an insolvent person of all of his property to a
trustee for the general benefit of creditors.
Automatic Discharge
See
Discharge from Bankruptcy.
Bailiff ( Huissier )
A person who acts on behalf of any other person in the repossession or seizure
of property
Bankrupt ( Failli )
A natural person or corporation who has made a voluntary assignment in
bankruptcy or against whom a receiving order has been made.
Bankruptcy ( Faillite )
The state of being bankrupt or the fact of becoming bankrupt.
BIA ( LFI )
Bankruptcy and Insolvency Act, a federal statute governing bankruptcy
and insolvency in Canada, which is applicable to all provinces and
territories.
CAIRP ( ACPIR )
Canadian Association of Insolvency and Restructuring Professionals is the
national professional organization representing trustees in bankruptcy,
receivers, agents,
monitors and consultants in insolvency matters.
CRA ( ARC )
Canada Revenue Agency (formerly known as Canada Customs and Revenue
Agency (“CCRA”)
Certificate of Full Performance of
Proposal ( Certificat
d'exécution
intégrale d'une proposition )
A document issued by the trustee or administrator once a debtor has fully
performed his or her obligations under the proposal.
Charge ( Droit )
An encumbrance, lien or financial obligation attached to property.
CCAA ( LACC )
Companies' Creditors Arrangement Act.
CIRP ( PAIR )
Chartered Insolvency and Restructuring Professional; a professional designation
given by CAIRP to those who meet the Association's standards for admission,
complete the prescribed course of study and pass the required examinations.
Claim, Provable
See
Provable Claim
.
Collateral ( Bien donné en garantie )
Property that is pledged as security against a debt.
Conditional Discharge
See
Discharge From Bankruptcy
.
Conditional Sale ( Vente conditionnelle )
The sale of goods where the buyer receives possession of goods or property, but
does not receive title to them until specific conditions are fulfilled.
Consolidation Order ( Ordonnance de fusion )
In specific provinces, an order handed down by a provincial court to combine
the debts of an insolvent person pursuant to the Orderly Payment of Debt
Regulations
in Part X of the Bankruptcy and Insolvency Act. (See Voluntary Deposit scheme).
Consumer Proposal ( Proposition de consommateur )
A simplified process to make a proposal for repayment of debt to creditors,
available under the Bankruptcy and Insolvency Act to a consumer debtor
whose aggregate debts, excluding any debts secured by the person's principal
residence, do not exceed the amount prescribed in the Bankruptcy and
Insolvency Act.
Contingent Claim ( Réclamation éventuelle
)
A provable claim in bankruptcy that may or may not become a debt depending upon
the result of some future event.
Corporation ( Personne morale (société)
)
A legal entity (usually a business), distinct from its shareholders, which has
the authority to act as a natural person.
Counselling ( Consultation )
A process under which services of a qualified counsellor are made available to
assist and educate bankrupts and/or relatives of bankrupts, or consumer
debtors, on
good financial management, including prudent use of consumer credit and
budgeting principles; in developing successful strategies for achieving
financial goals and
overcoming financial setbacks; and at any time, where appropriate, making
referrals to deal with non-budgetary causes of insolvency (e.g.: gambling,
addiction, marital and family problems, etc.).
Creditor ( Créancier )
One to whom a debt is owed; in insolvency matters, a person (see definition of
“person”) having a claim provable under the
Bankruptcy and Insolvency Act.
Debt ( Dette )
A specific sum of money due by agreement or otherwise.
Debtor ( Débiteur )
One who owes money to another.
Deemed Trust ( Fiducie présumée )
A trust established by statute. For example, income tax deducted at source as
prescribed by the Income Tax Act is deemed to be held in trust for the
Crown.
Default ( Manquement )
Failure to pay or perform a legal or contractual obligation.
Discharge From Bankruptcy ( Libération de faillite )
The release of a debtor from the obligation to repay his or her debts. A
bankrupt's discharge may be automatic, suspended, conditional or absolute. A
bankrupt may
also be refused discharge.
Automatic Discharge
A first time bankrupt whose discharge is not opposed by the Superintendent, a
trustee or a creditor and who has not refused or neglected to receive
counselling, is
automatically discharged on the expiration of the nine month period immediately
following the bankruptcy.
Order of Absolute Discharge
This official document issued by the court relieves the debtor of the debts
incurred before the debtor declared bankruptcy, taking under consideration the
exceptions
provided in the Act.
Order of Conditional Discharge
The court may impose certain conditions that must be met before a person's
discharge becomes absolute. For example, the Court may require you to pay an
amount to your trustee for distribution to your creditors.
Order of Suspended Discharge
The court orders a delay so that the discharge will not be effective until a
certain date.
Dividend ( Dividende )
The proportional share of a bankrupt's estate paid out by the trustee to
creditors who have proven claims against that estate.
Duties of a Bankrupt ( Obligations d'un failli )
Obligations that must be performed by a bankrupt. For example, provide the
trustee with a statement of the bankrupt's affairs showing the particulars of
his or her
assets and liabilities, the name of all his creditors etc.
Encumbrance ( Grèvement )
A claim or liability that is attached to property or some other right that may
lessen its value, eg. a lien or mortgage.
Equity ( Avoirs propres )
The difference between the market value of an asset and the secured debt
against it.
Estate ( Actif )
All the property of a person; the file in bankruptcy
Examination ( Interrogatoire )
Questioning of the bankrupt under oath with respect to the bankrupt's conduct,
causes of bankruptcy and disposition of the bankrupt's property. The
examination
may be conducted by an Official Receiver, a trustee, a creditor or other
interested person in accordance with conditions prescribed in the
Bankruptcy and
Insolvency Act.
Exempt Asset ( Bien exempté )
Assets defined as exempt by provincial legislation that are not available to
the trustee for the benefit of creditors.
Garnishment ( Saisie-arrêt )
A legal process whereby a creditor requires a third party to turn over to the
creditor, a debtor's property such as wages or bank accounts.
General Rules ( Règles générales
)
Rules created pursuant to the Bankruptcy and Insolvency Act for the
administration of this statute.
Guarantor ( Garant )
A person (see definition of “person”) who
takes on financial responsibility for another's debt.
Hypothec ( Hypothèque )
A right on property given to a creditor as performance for an obligation. The
creditor then has a right to follow the property even if it undergoes
successive changes of
ownership.
Inspector ( Inspecteur )
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.
Insolvency ( Insolvabilité )
The condition of being unable to pay debts as they become due, or in the
ordinary course of business, or having liabilities that exceed the total value
of assets.
Interim Receiver ( Séquestre intérimaire )
A trustee appointed by the court to safeguard the estate assets and perform
such other functions as the court may order for such time period as the court
may
determine.
Joint and Several Liability ( Obligation conjointe et solidaire )
The liability of more than one individual that may be enforced against them all
by a joint action or against any one of them by an individual action.
Judgment ( Décision judiciaire )
A formal decision issued by a court on a matter under its consideration.
Levy ( Prélèvement )
An fee payable to the Superintendent of Bankruptcy for the purpose of defraying
the expenses of the supervision by the Superintendent in the administration of
estates.
Liabilities ( Obligations )
Financial obligations or debt of an individual or a business, including unpaid
taxes, salaries, accounts payable etc.
Lien ( Droit de rétention )
A legal right or interest that a creditor has in a debtor's property, lasting
usually until the debt that it secures is satisfied.
Liquidation ( Liquidation )
The act of converting assets to cash, especially in bankruptcy or in the
dissolution of a business.
Mortgage ( Hypothèque )
A lien against property, which is registered on title, that is granted to
secure an obligation such as a debt.
Notice of Intention to Enforce
Security ( Avis d'intention
d'exécuter la
garantie )
A legal document under the Bankruptcy and Insolvency Act whereby a
secured creditor provides 10 days notice to an insolvent debtor of its
intention to
enforce its security.
Notice of Intention to File a
Proposal ( Avis d'intention de
déposer une
proposition )
A legal document filed with the Official Receiver stating that the debtor
intends to file a proposal. The document is to include the name and address of
the licensed
trustee who has consented in writing to act as the trustee under the proposal
and the names of the creditors who are owed $250 or more and the amounts of
their claims. The filing of this document triggers the protection afforded to
insolvent debtors under the Bankruptcy and Insolvency Act.
Offences ( Infractions )
The offences and sanctions provisions are contained in Part VIII of the
Bankruptcy and Insolvency Act. These are criminal or quasi-criminal
violations of
law; a person guilty of an offence is liable to a fine or imprisonment.
Official Receiver ( Séquestre officiel )
The Official Receiver is a federal government employee in the Office of the
Superintendent of Bankruptcy and appointed by the Governor in Council. The
Official
Receiver, among other things, accepts the documents that are filed in proposals
and bankruptcies, examines bankrupts under oath and chairs meetings of
creditors.
Orderly Payment of Debts ( Règles sur le paiement méthodique
des dettes )
A procedure prescribed in Part X of the Bankruptcy and Insolvency Act
, governed by provincial courts, which allows a person to pay debts.
Ordinary Resolution ( Résolution ordinaire )
A resolution carried by the majority of votes (one vote for each dollar of
debt) of claims of creditors at a meeting of creditors; disallowed claims do
not have votes.
OSB ( BSF )
Office of the Superintendent of Bankruptcy, an agency of Industry Canada. The
Office of the Superintendent of Bankruptcy supervises the administration of the
Bankruptcy and Insolvency Act. The OSB has Division Offices throughout
Canada.
Person ( Personne )
Includes a natural person (human being), a partnership, and a corporation that
is recognized by law as having the same rights and duties as a natural
person.
Petition for Receiving Order (
Requête en faillite )
An application to a court of law made by creditors in order to put the debtor
in bankruptcy.
Power of Attorney ( Mandat )
A legal instrument (document) setting out explicitly an individual's authority
to act as the agent of the person giving the power of attorney.
Preference ( Préférence )
The payment of money or the granting of security by an insolvent debtor that
benefits one or more creditors to the detriment of the other creditors.
Preferred Creditor ( Créancier privilégié
)
A creditor who has been given priority under the Bankruptcy and Insolvency
Act over other creditors in the distribution of dividends.
Priority ( Priorité )
The order in which creditors are ranked for payment of claims provable under
the Bankruptcy and Insolvency Act.
Proof of Claim ( Preuve de réclamation )
A creditor's written statement that is submitted to prove the creditor's claim;
used as the basis for paying dividends, if accepted by the trustee.
Provable Claim ( Réclamation prouvable )
Any liability of the debtor for a debt incurred before the date of the
bankruptcy.
Property ( Bien )
Includes money, goods, land and every description of property, whether real or
personal, situated in Canada or elsewhere.
Proposal ( Proposition )
An offer to creditors to settle debts under conditions other than the existing
terms. It is a formal agreement under the Bankruptcy and Insolvency
Act.
Proxy ( Procuration )
A document signed by a creditor granting another person the authority to
represent them at creditors' meetings. The proxy holder can exercise the
creditor's right to
vote.
Quorum ( Quorum )
The minimum number of creditors who must be present in person or by proxy to
conduct business or to take a vote. At a meeting of creditors, one creditor
present,
in person or by proxy, who has duly proven a claim with the trustee prior to
the meeting, constitutes a quorum.
Receiver ( Séquestre )
A person who has taken possession pursuant to a security agreement of
substantially all of the inventory, accounts receivables or the other property
of the debtor.
"Receiver" also includes a person who has been appointed privately pursuant to
a security agreement or by an order of the court for the protection or
collection of
property that is the subject of diverse claims, usually to seize and sell the
property of the debtor.
Registrar ( Registraire )
An Officer of a provincial court appointed by the Chief Justice with the powers
and jurisdiction as specified under the Bankruptcy and Insolvency
Act.
Related Persons ( Personnes liées )
Persons who are connected by a blood relationship, marriage, adoption or common
law partnership; while so related, they are deemed not to deal with each other
at
arm's length. The Act provides that the definition of related persons extends
to corporations, shareholders and directors in certain specified situations.
RESP ( REEE )
Registered Education Savings Plan
RHOSP ( REEL )
Registered Home Ownership Savings Plan
RRSP ( REER )
Registered Retirement Savings Plan
Secured Creditor ( Créancier garanti )
A person holding an instrument such as a mortgage or a lien on or against the
whole or part of the property of a debtor as security for a debt due him from
the
debtor.
Security ( Garantie )
Property or asset given or pledged to guarantee the fulfilment of an
obligation, eg. for the payment of a loan.
Seizure ( Saisie )
The act of taking possession of property by legal right or process.
Sheriff ( Shérif )
Includes bailiff and any officer charged with the execution of a writ or other
process under the Bankruptcy and Insolvency Act or any other Act or
proceeding with respect to any property of a debtor.
Special Resolution ( Résolution spéciale )
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.
Statement of Affairs ( Bilan )
The bankrupt's financial statement or a balance sheet of assets and liabilities
showing the estimated value of assets and the names and addresses of creditors
and
the amounts owed.
Statement of Receipts and
Disbursements ( État des
recettes et des
débours )
A statement detailing the receipt and disbursement of funds, interest received,
fees charged by the trustee, all the dividends distributed to the creditors and
particulars of property that is not sold.
Stay of Proceedings ( Suspension des procédures )
A bar against any creditor for the recovery of a claim provable in bankruptcy
against the insolvent person or the insolvent person's property. No creditor
shall start or
continue any action, execution or other proceeding for the recovery of such
claims.
Superintendent of Bankruptcy (
Surintendant des faillites )
A federally appointed official who oversees the administration of the
Bankruptcy and Insolvency Act in Canada.
Surplus Income ( Revenu excédentaire )
The portion of an individual bankrupt's income that is required to be paid into
the bankruptcy estate during the bankruptcy as per standards established by the
OSB.
Suspended Discharge
See
Discharge from Bankruptcy
.
Taxation of Accounts ( Taxation des comptes )
Application for court approval of the fees and disbursements of the trustee,
interim receiver or legal counsel.
Trust ( Fiducie )
A property interest held by one person at the request of another for the
benefit of a third party.
Trustee in Bankruptcy ( Syndic de faillite )
A person licenced by the Superintendent of Bankruptcy to administer bankruptcy
and proposal estates.
Unsecured Creditor ( Créancier non garanti )
A creditor who advances credit without taking any rights against the property
of the debtor.
Voting Letter ( Formule de votation )
A document in which a creditor with a provable claim registers his vote for or
against a proposal.
Voluntary Deposits Scheme ( Dépôt volontaire
(Loi Lacombe) )
For the residents of Québec, a proceeding where the debtor makes a
monthly payment based on his income and number of dependents to the court who
will
distribute theses payments to the creditor. (See
Consolidation Order
).
Warranty ( Garantie )
A written guarantee of performance from a vendor to a purchaser stating that
the item being sold is good and fit for its intended use by the purchaser.
Updated: 2005-06-17 |