If you have a corporation that cannot pay off its debts, you will want to get professional assistance in deciding your next steps. Filing for bankruptcy is an option of last resort, but fortunately your liability is limited in a corporation. If your corporation files for bankruptcy, the business won't continue and employees will likely lose their jobs although they may be entitled to recover severance. With much at stake, it is important to obtain a consultation with a Licensed Insolvency Trustee (LIT) to find out if you qualify for any alternatives to bankruptcy.
A voluntary assignment is the most common. In a voluntary assignment into bankruptcy, you assign your company’s assets to for the general benefit of your creditors on your own accord. Your company would need to be insolvent.
In a petition for a bankruptcy order (involuntary assignment), your creditors will file a petition in a provincial court to seize your assets. Your creditors need to state in a court application that you have committed an act of bankruptcy within the last six months.
If a restructuring plan is voted down in a Division I Proposal or does not receive court approval, your company will be deemed bankrupt.
A Licensed Insolvency Trustee can conduct a review of your corporate finances to help you determine if there is another option that is suitable besides declaring bankruptcy. Often there is another option available to you even if your corporation has been insolvent for an extended period of time.
If there is no other option but bankruptcy, your trustee will administer the process, complete the necessary forms, and handle all communications with creditors. Company assets will be liquidated to pay creditors as much as possible.
Contact Harris & Partners Inc. if your corporation is insolvent and you are contemplating corporate bankruptcy in Toronto, North York, or Brampton. We can also help you with corporate bankruptcy in Markham, Hamilton, Oshawa, Pickering, Barrie, Brantford and St. Catharines. Our role as Licensed Insolvency Trustee’s is to help you consider your options, stop collection calls, lower your interest rates, consolidate your debts and help you to overcome your debts. Call us for your free consultation at 1-800-268-8093.
Do you have any questions that you would like to discuss with our professional trustees? Fill out this form with as much information about your situation as possible. Or you can call Harris & Partners at 1-800-268-8093.