Claiming Bankruptcy? Speak to a Licensed Insolvency Trustee in Southern Ontario


In a personal bankruptcy, your assets are assigned to a Licensed Insolvency Trustee (previously known as Trustee in Bankruptcy) and Restructuring Professional in exchange for the elimination of most of your debts. A personal bankruptcy is usually made by a voluntary assignment. Once bankruptcy is declared, you get legal protection from your creditors and a chance to start over fresh but are required to perform certain duties. You are required to attend two financial counselling sessions, must pay surplus income and report your monthly income to the Trustee until you are discharged (which takes a minimum of 9 months).

The creditors get paid by the Trustee through payments from your surplus income and realization of non-exempt assets. Your bankruptcy will be recorded on your credit report for at least the next 6 years, which will negatively affect your ability to obtain credit. Filing for bankruptcy should be your last resort after all other alternatives have been considered.


A consumer proposal is an alternative to bankruptcy where the Licensed Insolvency Trustee and Restructuring Professional, acting as a consumer proposal administrator, negotiates with your creditors to satisfy your debts. On the day you file a consumer proposal, you are provided with immediate protection in the form of a freeze on collection actions, including harassing phone calls. You will pay a portion of what you owe for a period not exceeding 5 years and, in exchange, your creditors agree to forgive the balance. You will have certain duties during the consumer proposal, including keeping your payments current and attending two financial counselling sessions. Your home or other assets remain yours, and your credit is not affected as negatively (at an R7 rating) as a bankruptcy (at an R9 rating) or for as long.

Corporate Bankruptcy

A corporate bankruptcy refers to when an insolvent incorporated business files for bankruptcy under the Bankruptcy and Insolvency Act. Once a corporation in Canada declares bankruptcy, its affairs are brought to an end, and a Licensed Insolvency Trustee and Restructuring Professional takes care of administrative matters, including selling any property, investments or assets, filing any outstanding tax returns, meeting with the creditors, and reporting on the bankruptcy to the creditors and to the Office of the Superintendent of Bankruptcy.

There are alternatives to a corporate bankruptcy. If the business is worth saving but has too much debt, you may want to consider a Notice of Intention to Make a Proposal/Division I Proposal, which gives a corporation legal protection from creditors for 30 days to 6 months. If the corporation owes more than $5 million, you can consider restructuring under the Companies’ Creditors Arrangement Act. The professionals at Harris & Partners Inc. are always available to meet to discuss your company’s financial difficulties and to determine the best way to restructure.

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