The Parliament of Canada has exclusive jurisdiction to regulate matters relating to bankruptcy and

insolvency In accounting, insolvency is the state of being unable to pay the debts, by a person or company (debtor), at maturity; those in a state of insolvency are said to be ''insolvent''. There are two forms: cash-flow insolvency and balance-sheet in ...

, by virtue of Section 91(2) of the

Constitution Act, 1867 The ''Constitution Act, 1867'' (french: Loi constitutionnelle de 1867),''The Constitution Act, 1867'', 30 & 31 Victoria (U.K.), c. 3, http://canlii.ca/t/ldsw retrieved on 2019-03-14. originally enacted as the ''British North America Act, 186 ...

. It has passed the following statutes as a result: :* The ''

Bankruptcy and Insolvency Act The ''Bankruptcy and Insolvency Act'' (BIA; french: Loi sur la faillite et l'insolvabilité) (the ''Act'') is one of the statutes that regulates the law on bankruptcy and insolvency in Canada. It governs bankruptcies, consumer and commercial prop ...

'' ("BIA") :* The ''

Companies' Creditors Arrangements Act The ''Companies' Creditors Arrangement Act'' (CCAA; french: Loi sur les arrangements avec les créanciers des compagnies) is a statute of the Parliament of Canada that allows insolvent corporations owing their creditors in excess of $5 million t ...

'' ("CCAA") :* The '' Farm Debt Mediation Act'' :* The '' Wage Earner Protection Program Act'' :* The ''

Winding-Up and Restructuring Act The ''Winding-up and Restructuring Ac''t (french: Loi sur les liquidations et les restructurations) ("WURA") (the ''Act'') is a statute of the Parliament of Canada that provides for the winding up of certain corporations and the restructuring o ...

'' (which essentially applies only to financial institutions under federal jurisdiction) In applying these statutes, provincial law has important consequences. Section 67(1)(b) of the BIA provides that "any property that as against the bankrupt is exempt from execution or seizure under any laws applicable in the province within which the property is situated and within which the bankrupt resides". Provincial legislation under the

property and civil rights Section 92(13) of the '' Constitution Act, 1867'', also known as the property and civil rights power, grants the provincial legislatures of Canada the authority to legislate on: It is one of three key residuary powers in the '' Constitution Act, ...

power of the

regulates the resolution of financial difficulties that occur before the onset of insolvency. Notable legislation is in effect for governing: * creation of

security interest In finance, a security interest is a legal right granted by a debtor to a creditor over the debtor's property (usually referred to as the ''collateral'') which enables the creditor to have recourse to the property if the debtor defaults in maki ...

s (with notable caveats) * absconding debtors * bulk sales (in Ontario only) *

fraudulent conveyance A fraudulent conveyance, or fraudulent transfer, is an attempt to avoid debt by transferring money to another person or company. It is generally a civil, not a criminal matter, meaning that one cannot go to jail for it, but in some jurisdictions th ...

s * relief of creditors * seizure of assets * assignments and preferences

Administration of insolvency law

The Office of the Superintendent of Bankruptcy is charged with the administration of the BIA and the CCAA. All records relating to matters under those Acts are accessible at their website. The Office also licenses insolvency trustees ( LITs), who are authorized to: :* administer estates of bankrupts :* handle consumer and commercial proposals in order to forestall an assignment in bankruptcy :* act as a monitor under the CCAA :* act as a receiver under Part XI of the BIA, to take possession and administer property as a consequence of provisions in a security agreement or by virtue of any federal or provincial law that authorizes the appointment of a receiver or receiver-manager

References

{{Americas topic, Bankruptcy in

Administration of insolvency law

See also

References