Bankruptcy is a legal process to help individuals and businesses get rid of debt or repay debts under the protection of the bankruptcy court. If you are having financial trouble, there are many bankruptcy laws in Canada to help you get a fresh start. Some of the laws were established by the federal government and others were put into place by the province. All the bankruptcy laws, though, work to preserve your rights and the rights of your creditors, or the people you borrowed money from.
There are two major pieces of legislation that govern bankruptcies in Canada – the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act.
The Bankruptcy and Insolvency Act
The BIA was established by the federal government to help unfortunate, but honest people recover from their financial problems and have a fresh financial start. This law details the responsibilities and rights of all the people involved in solving debt problems – the Superintendent of Bankruptcy, the official receivers who represent the Superintendent of Bankruptcy, the court, Licensed Insolvency Trustees, and you, the consumer. The BIA governs all bankruptcies in Canada.
The Companies’ Creditors Arrangement Act
The CCAA is a federal bankruptcy law that governs insolvency of companies and corporations. Essentially, it preserves the rights of the company and creditors, or people they owe money to, and details the responsibilities of the court, the corporation, and the creditors. It is separated into 3 parts:
Each province has specific laws for dealing with bankruptcy and debt solutions. These laws often deal with what property you can keep when you go bankrupt, and how to handle your assets and income during the period of bankruptcy.
When hiring a bankruptcy lawyer, you shouldn’t’ leave anything to chance. Make sure that your bankruptcy lawyer has the experience and skill that your case requires. At LawyerSelect, we handpick all the lawyers by conducting a thorough background check, ensuring that the bankruptcy lawyer is qualified in all areas of Canadian bankruptcy law, and has the experience to guide clients through the complicated bankruptcy process.