Tag: stay of proceedings

Brandon Blog Post

CORPORATE DEBT RESTRUCTURING STRATEGIES FOR ONTARIO BUSINESS OWNERS: STOP INSOLVENCY

Post author By Brandon Smith
Post date February 9, 2026

corporare debt restructuring

By Brandon Smith, Senior Vice-President, Licensed Insolvency Trustee at Ira Smith Trustee & Receiver Inc.

Corporate Debt Restructuring Key Takeaways:

The Division I Proposal is a proactive business strategy, not a sign of financial failure, designed to restructure significant corporate debt in a financially distressed company or business.
It offers immediate legal protection from creditors through a “stay of proceedings,” allowing your business to stabilize and strategize.
Creditors often prefer a Division I Proposal because it typically offers a better financial return (e.g., 30 cents on the dollar) than the high risk of receiving nothing in a corporate bankruptcy.
Only a Licensed Insolvency Trustee (LIT) like those at Ira Smith Trustee & Receiver Inc. can guide your Ontario business through this complex, yet powerful, restructuring process.
Ira Smith Trustee & Receiver Inc. provides expert, empathetic, and authoritative support to help your business successfully pivot, preserve value, and secure a sustainable future in Vaughan and across the GTA.

1. Corporate Debt Restructuring Introduction: Navigating Financial Distress – The 2026 Business Landscape

The economic currents in Ontario are always shifting, and as we are now just a bit over a month into 2026. Many business owners in Vaughan and the Greater Toronto Area (GTA) are feeling the squeeze. From rising costs to uncertain market demands and persistent interest rate pressures, navigating these waters can lead to significant financial challenges. For dedicated entrepreneurs, the burden of mounting corporate debt restructuring can feel overwhelming, threatening the very existence of the businesses they’ve poured their lives into.

But here’s a crucial truth: financial difficulty doesn’t automatically mean the end of your company. In fact, it can be the precise moment for a powerful strategic pivot. At Ira Smith Trustee & Receiver Inc., we specialize in helping viable businesses overcome these hurdles. We firmly believe that the Division I Proposal is not a sign of failure, but rather a robust tool for corporate debt restructuring – a smart, calculated business move that allows your company to adapt, shed unsustainable debt, and emerge stronger and more resilient for the future.

corporare debt restructuring

2. What is Corporate Debt Restructuring?

Corporate debt restructuring is a formal process where a company facing financial difficulty reorganizes its outstanding debts to improve its financial health and avoid bankruptcy. The primary goal is to create a sustainable financial future by changing how and when debts are paid. This process allows the business to continue operating, preserving its value, jobs, and market presence, rather than undergoing liquidation, where assets are sold off.

In Canada, formal restructuring processes for businesses are primarily governed by federal law, specifically the Bankruptcy and Insolvency Act (BIA). While very large corporations (with debts over $5 million) might use the Companies’ Creditors Arrangement Act (CCAA), for the vast majority of Ontario businesses, the BIA provides the necessary framework for effective corporate debt restructuring.

This crucial process can involve various types of corporate debt, including:

Bank Loans: Both secured loans (backed by assets) and unsecured operating lines of credit.
Trade Payables: Money owed to your suppliers for goods or services purchased on credit.
Lease Obligations: Financial obligations arising from equipment leases or commercial property leases.
Unsecured Loans: Loans not tied to specific company assets.
Credit Card Debts: Business credit cards used for operational expenses.
Tax Debts: Certain obligations owed to the Canada Revenue Agency (CRA), such as corporate income tax or unremitted HST. Although unremitted source deductions cannot be eliminated, an extension of time to pay is available.
Employee-Related Debts: Unpaid wages, vacation pay, or other benefits (though these often have special priority under the law).

By reorganizing these debts, a business can align its payment obligations with its actual cash flow, making its financial future manageable and sustainable.

3. Corporate Debt Restructuring Introduction Using The Division I Proposal: Your Business Pivot Tool

When an Ontario business needs to undergo formal corporate debt restructuring, the Division I Proposal is the powerful Canadian solution under the Bankruptcy and Insolvency Act (BIA). It is critical to understand that this is distinctly different from “Chapter 11 bankruptcy” processes you might hear about in the United States, which fall under a different legal jurisdiction. A Division I Proposal is a formal, legally binding offer made by an insolvent corporation (or an individual with high debts) to its unsecured creditors to repay a portion of what is owed, extend repayment periods, or alter other payment terms.

This mechanism serves as a true “Business Pivot” for several compelling and strategic reasons:

Immediate Legal Protection (Stay of Proceedings): This is often the most significant and immediate benefit. Once a Notice of Intention (NOI) to file a proposal, or the proposal itself, is formally filed with the Office of the Superintendent of Bankruptcy (OSB), your business gains immediate legal protection from most creditors. This crucial “stay of proceedings” means:
- All collection calls and harassing communication from creditors must cease.
- Existing lawsuits and new legal actions against your company are automatically paused.
- For consumers, wage garnishments, if any, are stopped.
- Creditors are prevented from seizing your company’s assets or enforcing judgments. This creates essential breathing room, allowing your management team to focus on operations and strategize without constant external pressure.
Business Continuity and Preservation: Unlike corporate bankruptcy, where the business typically ceases operations and assets are sold off, a Division I Proposal is designed to allow your company to continue running. This means you can:
- Retain your invaluable employees, protecting their livelihoods and your company’s institutional knowledge.
- Maintain crucial relationships with your loyal customers and essential suppliers.
- Preserve your company’s brand reputation and market presence.
- Continue generating revenue, which is vital for funding the restructured debt payments.
Debt Reduction and Manageable Terms: The proposal process empowers you to negotiate with your creditors to reduce the total amount of debt owed and/or extend the payment timeline. This results in a realistic, affordable repayment plan that directly aligns with your business’s projected cash flow, moving away from unmanageable debt loads.
Formal Negotiation Power: The BIA provides a structured, legally supported framework for negotiating with all your unsecured creditors at once. Instead of attempting to appease each creditor individually, your Licensed Insolvency Trustee acts as the central point for negotiation, ensuring fairness and efficiency.
No Debt Limit for Corporations: Unlike a Consumer Proposal for individuals, which has a debt ceiling, a Division I Proposal has no upper limit on the amount of debt a corporation can owe. This makes it a suitable and powerful tool for the corporate restructuring of businesses of varying sizes and complexities.
Potential Director Protection: When executed correctly by a skilled LIT, a Division I Proposal can offer directors a degree of protection against certain corporate liabilities that arise by law against anyone only because they are a director of a company, a critical concern for many business owners.

A Division I Proposal isn’t about giving up; it’s about strategically reorganizing to give your business a fresh, viable start. It’s a proactive choice for businesses with a solid core operation but overwhelmed by debt.

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4. The Economics of 2026: Why Creditors Accept Proposals

Understanding why creditors would agree to be paid less than the full amount owed is central to appreciating the Division I Proposal as a highly strategic move in corporate debt restructuring. The answer lies in pragmatic economics, risk assessment, and the realities of the current and predicted economic climate for 2026.

The “30 Cents vs. 0 Cents” Logic

Creditors, whether they are large financial institutions, trade suppliers, or the Canada Revenue Agency, are fundamentally pragmatic. Their primary objective is to recover as much of the money owed to them as possible. In many scenarios, if a financially distressed business is forced into corporate bankruptcy, the outcome for unsecured creditors is often dismal. After secured creditors (like banks with collateral) are paid, and the costs of liquidation are covered, there is frequently little to no money left for unsecured creditors. This can tragically result in them receiving 0 cents on the dollar.

A carefully crafted Division I Proposal dramatically changes this equation. It results in the payment of a percentage of the ordinary unsecured debt – for instance, 30 cents on the dollar. This result from a corporate restructuring is a far more attractive, certain, and predictable outcome compared to the high risk of receiving nothing at all in a corporate liquidation.

Creditors’ Perspective in the 2026 Economic Landscape

In 2026, with the Canadian economy continuing to adapt to global shifts, fluctuating interest rates, businesses potentially facing tightened credit markets and rising costs, creditors are increasingly open to realistic and well-structured proposals. When evaluating a Division I Proposal, creditors typically consider:

The Business’s Underlying Viability: Does the company possess a strong core business model that has the potential to succeed and generate profit if its overwhelming debt load is reduced to a manageable level?
Management’s Competence: Is the current leadership team capable of effectively implementing the proposed restructuring plan and steering the business towards profitability?
Cash Flow Projections: Are the financial projections realistic, demonstrating that the business can generate sufficient cash flow to make the proposed payments on time?
The Alternatives: What would they realistically receive if the company were to declare bankruptcy? The comparison between the proposed return and the estimated bankruptcy dividend is a critical factor. When a comprehensive and viable proposal is presented by an experienced Licensed Insolvency Trustee, clearly outlining a path to recovery and demonstrating a superior return compared to bankruptcy, creditors are strongly motivated to accept.

Once accepted by the required majority of unsecured creditors voting and approved by the court, the proposal becomes legally binding on all unsecured creditors, even those who initially voted against it. This collective, binding agreement is a cornerstone of the Division I Proposal’s power and effectiveness.

5. BIA Proposal vs. Bankruptcy: Distinguishing the Two Distinct Paths

It is absolutely crucial for any Ontario business owner considering corporate debt restructuring to understand the fundamental differences between a Division I Proposal and corporate bankruptcy. These are not interchangeable terms; they represent vastly distinct paths with significantly different outcomes for your business, its owners, and its creditors. One is about survival, strategic reorganization, and continuity; the other is about formal cessation and asset liquidation.

Here’s a clear comparison to highlight these key distinctions:

Criteria	Division I Proposal (BIA)	Corporate Bankruptcy (BIA)
Primary Goal	Restructure debt, ensure business continuity, save jobs, preserve value	Liquidate assets, formally close the business
Business Continuity	YES The business typically continues operating without interruption.	NO The business either immediately or ultimately ceases operations, and assets are sold.
Asset Retention	Key business assets (property, equipment, inventory) are generally retained by the company.	Assets are seized, collected, and sold off by the Licensed Insolvency Trustee to pay creditors.
Creditor Outcome	Creditors receive a negotiated percentage of what’s owed over time, often a better return than bankruptcy.	Creditors receive a pro-rata share of liquidation proceeds, which is often minimal or zero for unsecured creditors.
Legal Protection	Immediate “stay of proceedings” against most creditor actions upon filing NOI or proposal.	Immediate “stay of proceedings” against most creditor actions upon filing for bankruptcy.
Director Liability	Can offer a degree of protection and relief from certain corporate liabilities that become personal liabilities for directors (e.g., statutory debts).	While the corporation is bankrupt, certain statutory liabilities (e.g., unremitted source deductions, HST) for directors persist or arise.
Public Perception & Record	Seen as a strategic recovery or reorganization, a public record exists, but often carries less stigma.	A more severe public record, widely indicating business failure and often leading to loss of goodwill.
Credit Impact	Negative initially, but successful completion allows for rebuilding creditworthiness over time, demonstrating financial responsibility.	More severe and longer-lasting negative impact on corporate credit, often making future credit difficult to obtain for a new venture run by the same management.
Duration of Process	Flexible, typically structured over several years (e.g., 1 to 5+ years) based on the negotiated plan.	Generally involves an ongoing administration process until all assets are realized and distributed.
Control of Business	Management retains control of daily operations, guided by the proposal.	Control shifts to the Licensed Insolvency Trustee, who manages the liquidation process.

Choosing between a Division I Proposal and corporate bankruptcy is a monumental decision. It determines whether your business gets a second chance to thrive or is dissolved. The emotional and financial impacts are profound, making expert guidance from a Licensed Insolvency Trustee essential.

corporare debt restructuring

6. The Corporate Debt Restructuring Process: A Strategic Roadmap for a Division I Proposal

Navigating a Division I Proposal for corporate debt restructuring might seem daunting at first glance, but with the expert guidance of a Licensed Insolvency Trustee, it becomes a clear, structured, and manageable path to recovery. At Ira Smith Trustee & Receiver Inc., we break down this journey into distinct phases, ensuring you understand each step and feel supported throughout.

Corporate Debt Restructuring Phase 1: Initial Assessment and Consultation

Your Crucial First Step: The very first and most critical action you should take is to contact a Licensed Insolvency Trustee (LIT). In Canada, an LIT is the only professional legally authorized to administer a Division I Proposal. Our team at Ira Smith Trustee & Receiver Inc. offers confidential, no-obligation consultations to understand your unique situation.
Comprehensive Financial Analysis: We will conduct a thorough and impartial review of your company’s entire financial picture. This includes meticulously examining your assets, liabilities, revenue streams, operational expenses, and overall cash flow. We also work with you to identify the core strengths and viable aspects of your business that can be leveraged for a successful turnaround.
Developing the Proposal Plan: Working hand-in-hand with you, we will craft a realistic, feasible, and compelling proposal. This involves determining what percentage of your total debt your business can reasonably afford to repay over a specific timeframe. Our goal is to create a plan that maximizes the return for your creditors while simultaneously ensuring your business can continue to operate profitably and sustainably after the restructuring.

Corporate Debt Restructuring Phase 2: Filing the Notice of Intention (NOI) or the Proposal

Immediate Legal Protection: If your business needs more time to finalize the details of its comprehensive proposal plan, we can file a Notice of Intention (NOI) with the Office of the Superintendent of Bankruptcy (OSB). This filing immediately triggers the “stay of proceedings,” providing your business with crucial legal protection from creditors and stopping all collection actions.
Establishing a Timeline: The NOI grants your business an initial period of 30 days to prepare and file the formal Division I Proposal. This period is not set in stone; it can be extended by the court, if necessary, providing you with vital breathing room to complete all required documentation and negotiations. Alternatively, if your comprehensive plan is already finalized, we can file the proposal directly without an NOI.

Corporate Debt Restructuring Phase 3: The Meeting of Creditors

Presentation by Your LIT: As your appointed LIT, we take the lead in preparing for and conducting the meeting of creditors. During this meeting, we will formally present your Division I Proposal to all your unsecured creditors. This includes providing them with a detailed, transparent explanation of your company’s financial situation, the reasons for the proposal, and the specific terms of your offer.
The Critical Creditor Vote: Creditors will then have the opportunity to vote on whether to accept or reject your proposal. For the Division I Proposal to be legally accepted, two specific conditions must be met:

A simple majority (50% + 1) in number of the creditors who vote must approve the proposal.
Those approving creditors must collectively represent at least two-thirds (66.6%) of the total dollar value of the claims filed by all voting creditors.

- Reinforcing the “30 Cents vs. 0 Cents” Logic: A key part of our presentation as your LIT is to provide creditors with a clear estimate of what they would realistically receive if your company were to go bankrupt, compared to the return offered in the proposal. This directly reinforces the pragmatic economic advantage of accepting the proposal.

Corporate Debt Restructuring Phase 4: Court Approval and Implementation

Court approval: After the proposal passes the creditor vote, a judge has to act like a referee to make sure the “deal” is actually fair for everyone involved. First, the judge looks at the plan to see if it makes sense; if it passes that test, the judge makes sure that the corporate debt restructuring plan does not run afoul of the BIA. Only after the judge gives their official “okay” does the Division I Proposal debt relief plan become effective.
Legally Binding Agreement: As stated above, if the creditors accept the proposal, the final step is to submit it to the court for formal approval. Once the court grants its approval, the Division I Proposal becomes legally binding on all unsecured creditors, including any who may have voted against it. This legal enforceability is what gives the proposal its power and certainty.
Supervised Implementation and Monitoring: Your Licensed Insolvency Trustee will then oversee the administration of the proposal. This involves ensuring that your company adheres to all the agreed-upon payment terms and conditions and the BIA statute. We provide ongoing monitoring and support, ensuring accountability and steady progress towards your ultimate goal of becoming debt-free and financially stable.

The journey of a Division I Proposal is complex, but with Ira Smith Trustee & Receiver Inc., you’re never alone. We are committed to guiding your Ontario business through each phase with expertise and empathy.

7. Corporate Debt Restructuring Strategic Considerations for Your Business

A Division I Proposal is far more than just a mechanism for corporate debt restructuring; it is a sophisticated, strategic maneuver designed to protect and revitalize the long-term future of your business. Here are critical areas where its strategic value truly shines, offering benefits that extend far beyond simply reducing debt.

Preserving Business Value and Goodwill Through Corporate Debt Restructuring

Your business has spent years, perhaps decades, building valuable goodwill, establishing a loyal customer base, cultivating essential supplier relationships, and accumulating operational assets. A Division I Proposal is specifically designed to keep these vital components intact. By strategically avoiding corporate bankruptcy, you prevent the forced and often rapid liquidation of your assets, which frequently occurs at drastically undervalued prices. This preservation of your operating infrastructure allows your company to maintain its reputation, continue generating revenue, and retain its market position. This directly contributes to maximizing the recovery for all stakeholders, including creditors, while securing your business’s future.

Employee Retention and Morale With Corporate Debt Restructuring

Your employees are not just a cost; they are the most valuable asset and the backbone of your business. A successful corporate debt restructuring through a Division I Proposal means you can typically avoid the devastating impact of mass layoffs or significant disruption to your workforce. Retaining your skilled, experienced, and loyal staff is absolutely vital for your company’s continued smooth operation, maintaining productivity, and achieving future growth. It prevents the costly process of rehiring and retraining, as well as the loss of invaluable institutional knowledge and company culture. Maintaining employee morale during challenging times is paramount, and a proposal offers a pathway to stability for everyone.

Through a Division I Proposal, it is also possible to reduce your headcount. The proposal can be worded so that the proper claims of employees who were terminated before or as part of the corporate debt restructuring process are caught in the proposal and do not survive.

Director Liability Protection With Corporate Debt Restructuring

One of the most significant and often frightening concerns for business owners facing financial distress is the spectre of personal liability. Directors of a corporation can, under Canadian law, be held personally liable for certain statutory debts, even if the company itself is a separate legal entity. These specific liabilities can include:

Unremitted Canada Pension Plan (CPP) and Employment Insurance (EI) deductions (source deductions).
Unpaid Harmonized Sales Tax (HST) amounts collected but not remitted.
Unpaid Workplace Safety and Insurance Board (WSIB/WCB) premiums.
Unpaid employee salary, wages and vacation pay.

A carefully structured and properly administered Division I Proposal, overseen by a Licensed Insolvency Trustee, can offer a crucial degree of protection or relief against some of these personal liabilities for directors. An important caveat is that it is only those liabilities that the directors are personally liable for solely as a result of their role as a director. It cannot absolve a director for their personal liability for any debts they personally guaranteed or indemnified a lender or landlord for.

It’s imperative to discuss your specific situation thoroughly with your LIT to understand the precise extent of this potential protection, as it is a complex area of law.

Negotiating with CRA (Canada Revenue Agency) In A Corporate Debt Restructuring

The Canada Revenue Agency (CRA) is a unique and often significant creditor for many businesses in Ontario. They have considerable power to enforce collections. However, a Division I Proposal provides a formal legal framework that allows for the effective restructuring of certain tax debts. This means you can include it in a Division I Proposal, allowing for a manageable payment plan. Amounts owed for corporate income tax and unremitted HST can be eliminated through a completed Division I Proposal. Although unremitted source deductions cannot be eliminated like other CRA debts, a debtor has up to 6 months after court approval to pay off that debt in full.

As your LIT, Ira Smith Trustee & Receiver Inc. has extensive experience dealing with the CRA and can expertly incorporate these complex tax debts into your comprehensive proposal, ensuring a holistic solution.

Secured vs. Unsecured Creditors: Differentiating Approaches

Business owners need to understand that different types of creditors are treated differently within a Division I Proposal. Unsecured creditors (those without specific collateral tied to their debt) are legally bound by an approved Division I Proposal.

Secured creditors, however, who hold specific collateral (such as a bank with a mortgage on your property or a lien on equipment), have an option: they can choose to participate in the proposal, or they can opt to act independently outside of the proposal framework (with certain requirements needing to be fulfilled if they wish to enforce their security after the filing of the NOI or Division I Proposal).

Your LIT will provide expert guidance through these negotiations with all creditor types, developing a strategy that aims to achieve the best possible outcome for your business’s overall financial health and stability.

corporare debt restructuring

8. Brandon’s Corporate Debt Restructuring Take: Why Expertise Matters in Your Business Pivot

As Senior Vice-President at Ira Smith Trustee & Receiver Inc. and a dedicated Licensed Insolvency Trustee, I’ve had the privilege of walking alongside countless Ontario business owners facing the profound fear and uncertainty that comes with financial distress. It’s a heavy burden, one that often impacts not only the business’s bottom line but also the personal well-being and mental health of the entrepreneur and his or her family.

My take is this: the Division I Proposal is not, and should never be viewed as, a “last resort” for businesses that have already failed. Instead, it is a highly sophisticated, strategic, and often proactive tool for smart, decisive business owners who recognize financial challenges early. It’s for those who choose to take control, proactively navigate their way back to prosperity, and ensure their company’s long-term viability. This process is fundamentally about preserving valuable assets, protecting jobs, and safeguarding the legacies you’ve worked so hard to build.

At Ira Smith Trustee & Receiver Inc., we do more than just process paperwork; we partner with you to meticulously craft a future for your business. We offer not only profound expertise in the intricacies of Canadian insolvency but also a deep sense of empathy and understanding for the challenges you face.

The complex requirements of the Bankruptcy and Insolvency Act, the delicate nuances of creditor negotiations (including with the CRA), and the critical timelines involved all demand the steady hand and seasoned judgment of an experienced Licensed Insolvency Trustee. Choosing the right expert is, without exaggeration, the single most important decision you will make on this journey. We are deeply committed to helping you transform financial distress into a powerful and successful business pivot.

9. Corporate Debt Restructuring FAQ Section: Understanding Your Division I Proposal Options

Here are answers to some of the most common questions Ontario business owners ask about Division I Proposals for corporate debt restructuring:

Q1: What is a Division I Proposal in Ontario, Canada?

A: A Division I Proposal in the GTA in Ontario, Canada, is a formal, legally binding offer made by an insolvent corporation (or an individual with significant debt exceeding $250,000, excluding their primary residence mortgage) to its unsecured creditors under the Bankruptcy and Insolvency Act (BIA). Its purpose is to restructure debt, allowing the business to continue operating while repaying a portion of what is owed, often over an extended period, in return for the balance of the debt eliminated. It provides immediate legal protection from creditors and aims to prevent corporate bankruptcy.

Q2: How does a BIA Division I Proposal differ from corporate bankruptcy in Canada?

A: A BIA Division I Proposal’s primary goal is to restructure debt and keep the business operating, preserving assets, jobs, and goodwill. In contrast, corporate bankruptcy in Canada involves the liquidation of a company’s assets to pay creditors, typically resulting in the cessation of business operations. While both offer a “stay of proceedings” from creditors, a proposal is a path to recovery and continuity, whereas bankruptcy is a path to formal closure and liquidation.

Q3: Why do creditors accept corporate debt restructuring proposals instead of forcing bankruptcy?

A: Creditors often accept corporate debt restructuring proposals because they are pragmatic and prefer a guaranteed recovery (e.g., a % on the dollar) over the high risk of receiving nothing in a corporate bankruptcy. In many bankruptcies, especially for unsecured creditors, the return is zero after liquidation costs. A well-structured Division I Proposal offers a more certain and, under the BIA, must be a higher financial return for creditors, making it a more attractive option.

Q4: What is the effect of a Division I Proposal on a business’s credit rating, and how can the business eventually recover?

A: Yes, similar to personal insolvency filings, initiating a Division I Proposal will negatively affect your business’s credit rating. However, completing the proposal by diligently adhering to the agreed-upon repayment schedule is the start of demonstrating financial responsibility and commitment. Making the proposal payments and all post-filing debt payments on time allows your business to systematically rebuild its creditworthiness over time, demonstrating a return to financial stability and reliability.

Q5: Can I include tax debts owed to the Canada Revenue Agency (CRA) in a Division I Proposal?

A: Yes, generally, certain tax obligations owed to the Canada Revenue Agency (CRA), such as corporate income tax and unremitted Harmonized Sales Tax (HST), can be included and restructured within a Division I Proposal. Debts related to unremitted source deductions need to be repaid in full, but the debtor is given additional time to pay off that debt. Directors should discuss potential personal liabilities for these with their LIT and their lawyer. A Licensed Insolvency Trustee has specialized experience in negotiating with the CRA and can effectively incorporate these complex tax debts into your comprehensive proposal.

Q6: How long does a Division I Proposal typically last?

A: While the Bankruptcy and Insolvency Act generally allows for proposals to extend up to five years, the actual duration can be longer in certain circumstances, if agreed upon by creditors and approved by the court. The specific length of your proposal depends on the terms negotiated with your creditors and approved by the court, balancing your business’s ability to pay with the creditors’ desire for timely recovery.

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10. Corporate Debt Restructuring Conclusion: Partnering with an Expert in Vaughan/GTA

Facing significant corporate financial distress is one of the most challenging experiences any business owner can endure. But it does not have to signal the end for your valuable enterprise. The Division I Proposal offers a powerful, strategic, and legally sound restructuring plan pathway to overcome overwhelming debt, comprehensively restructure your obligations, and ultimately secure a healthier, more sustainable future for your business. It’s an opportunity for your company to execute a decisive pivot, proving its resilience, strategic acumen, and commitment to long-term success.

Don’t let the immense weight of corporate debt restructuring define your business’s future. Instead, let it be the catalyst for a powerful and positive business pivot. If your Ontario business is grappling with financial challenges, seeking expert guidance early is not just beneficial—it is absolutely paramount. Delay can drastically limit your options and reduce your chances of a successful turnaround.

Located conveniently in Vaughan and proudly serving the entire Greater Toronto Area, our compassionate and highly experienced team of Licensed Insolvency Trustees at Ira Smith Trustee & Receiver Inc. is here to help. We offer confidential, no-obligation consultations where we will listen without judgment, thoroughly assess your unique financial situation, and help you explore whether a Division I Proposal is the right strategic path for your business to not just survive, but to truly thrive again.

Take the first crucial step towards a brighter financial future for your business. Contact Ira Smith Trustee & Receiver Inc. today to schedule your free initial consultation. Your business’s pivot to sustainable success starts now.

Don’t let financial uncertainty dictate your future. If you or your business is struggling with debt, losing sleep, or facing the possibility of legal action, contact Ira Smith Trustee & Receiver Inc. today. We offer a free, confidential consultation to discuss your situation, explain your options in plain language, and help you develop a clear, actionable plan. Our team of Licensed Insolvency Trustees is dedicated to providing the compassionate, professional support you need to regain control and achieve a debt-free life. Take the first step towards a brighter financial future – call us now.

Ira Smith Trustee & Receiver Inc. is licensed by the Office of the Superintendent of Bankruptcy and is a member of the Canadian Association of Insolvency and Restructuring Professionals.

Phone: 905.738.4167
Toronto line: 647.799.3312
Website: https://irasmithinc.com/
Email: brandon@irasmithinc.com

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Disclaimer: This analysis is for educational purposes only and is based on the cited sources and my professional expertise as a licensed insolvency trustee. The information provided does not constitute legal or financial advice for your specific circumstances.

Every situation is unique and involves complex legal and factual considerations. The outcomes discussed in this article may not apply to your particular situation. Situations are fact-specific and depend on the particular circumstances of each case.

Please contact Ira Smith Trustee & Receiver Inc. or consult with qualified legal or financial professionals regarding your specific matter before making any decisions.

About the Author:

Brandon Smith is a Senior Vice-President at Ira Smith Trustee & Receiver Inc. and a licensed insolvency trustee serving clients across Ontario. With extensive experience in complex court-ordered receivership administration and corporate insolvency & restructuring proceedings, Brandon helps businesses, creditors, and professionals navigate challenging financial situations to achieve optimal outcomes.

Brandon stays current with landmark developments in Canadian insolvency law. He brings this cutting-edge knowledge to every client engagement, ensuring his clients benefit from the most current understanding of their rights and options.

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Tags BIA restructuring, business pivot, corporate bankruptcy alternative, corporate debt restructuring, Division I Proposal, financial distress Ontario, GTA business debt, GTA corporate debt, Ira Smith Trustee, licensed insolvency trustee Ontario, save my business, small business debt restructuring Canada, stay of proceedings, unsecured creditors

Brandon Blog Post

BANKRUPTCY STAY OF PROCEEDINGS, EVICTION, AND ONTARIO LAW: WHEN HUGE TENANCY TROUBLES COLLIDE

Post author By Brandon Smith
Post date July 7, 2025

What is a Stay of Proceedings?

A stay of proceedings is like hitting the pause button on debt collection. When you file an assignment in bankruptcy, a consumer proposal or a Notice of Intention To Make A Proposal in Ontario, this legal protection automatically stops most unsecured creditors from taking collection action against you. If a claim is one purely for the collection of a debt advanced by one or more unsecured creditors, otherwise known as a claim provable in a bankruptcy or consumer proposal, then the stay of proceedings applies. But what happens when the legal action is not for the collection of a debt, like when an eviction is involved? A recent Ontario court case shows how complex this can get.

Understanding Stay of Proceedings in Canada

The Basics of Stay Protection

Under Canada’s Bankruptcy and Insolvency Act (BIA), a stay of proceedings provides immediate relief from:

Debt collection lawsuits
Wage garnishments
Asset seizures
Harassing creditor collection calls and collection agency calls

This protection starts the moment you file for bankruptcy or a consumer proposal with a Licensed Insolvency Trustee in your bankruptcy jurisdiction.

How Long Does a Stay of Proceedings Last?

The duration depends on your filing type:

First-time bankruptcy: Usually 9 months (21 months with surplus income)
Consumer proposal: Remains active while you make payments (up to 5 years)
Notice of Intention To Make A Proposal: This is a preliminary filing before filing a restructuring Division One Proposal for the benefit of creditors, where you don’t qualify to make a consumer proposal. The timeline is similar to that of a consumer proposal

Stay of Proceedings and Eviction: A Real Ontario Case

The Snaith Case: What Happened

A recent Ontario Superior Court of Justice – Ontario In Bankruptcy and Insolvency case (Re Snaith, 2025 ONSC 3413) shows what happens when bankruptcy meets eviction. Here’s the story:

Leanna Mae Snaith owed $46,250 in rent arrears by January 2025. Despite making some payments, she couldn’t catch up. The Landlord and Tenant Board ordered her eviction unless she paid $47,986 by February 28, 2025.

When Ms. Snaith couldn’t pay, she filed for bankruptcy in April 2025, hoping the stay of proceedings would stop her eviction.

Why the Stay Didn’t Stop the Eviction

The court made several key points:

Eviction orders aren’t debt collection: The tenancy was already terminated before bankruptcy
Post-bankruptcy rent must be paid: New rent after filing isn’t discharged in bankruptcy
Prior court orders remain valid: The eviction order was made before the bankruptcy filing

When Stay of Proceedings Doesn’t Apply

Exceptions to Stay Protection

A stay of proceedings doesn’t stop everything. It doesn’t apply to:

Criminal court cases
Family support payments (child support, spousal support)
Some secured creditor actions
Eviction enforcement when the tenancy was already terminated

Getting Around Stay Protection

Creditors can ask the court to “lift the stay” in certain situations. Under the BIA, the court has the authority to lift the stay if the person requesting the authority to begin or continue their action is likely to suffer material prejudice or if it is equitable on other grounds.

However, in eviction cases, landlords often don’t need to do this if the tenancy ended before bankruptcy.

Stay of Proceedings: What Tenants Need to Know

Can Bankruptcy Stop My Eviction?

The short answer: probably not if you’re already facing eviction.

Before eviction proceedings: A stay might pause the process temporarily
After eviction order: The stay won’t usually stop enforcement
Current rent: You must keep paying rent during bankruptcy

Smart Strategies for Rent Problems

If you’re behind on rent:

Act early: File for bankruptcy or a consumer proposal before eviction proceedings start
Keep paying current rent: Post-filing rent isn’t protected by the stay
Get professional help: Licensed Insolvency Trustees understand these complex rules

Stay of Proceedings: What Landlords Should Know

Your Rights During Tenant Bankruptcy

As a landlord, you should know:

Pre-bankruptcy rent arrears: These become unsecured debts in bankruptcy
Post-bankruptcy rent: Fully collectible and can lead to eviction
Eviction timing: File early to avoid stay complications

Working with Sheriff’s Offices

The Snaith case revealed confusion even among enforcement officers. Some sheriff’s offices won’t enforce evictions during bankruptcy, even when they legally can. You might need a court order confirming your right to proceed as was the case here.

Consumer Proposals vs. Bankruptcy: Stay Differences

Consumer Proposal Stay Benefits

A consumer proposal offers a stay of proceedings while potentially providing better outcomes:

Keep your home (if you can afford the payments)
Paying a portion of your debts
Protection lasts for the duration of the consumer proposal as long as you are meeting your payment obligations (usually up to 5 years)

Bankruptcy Stay Limitations

Bankruptcy provides immediate stay protection, but:

You will lose non-exempt assets
Post-bankruptcy obligations remain
Unless there are extenuating circumstances causing a longer period, the bankrupt will normally be discharged between 9 months (first time bankruptcy and no surplus income) and 21 months (first time bankruptcy with surplus income requirement)

Professional Guidance: Why You Need a Licensed Insolvency Trustee

The Snaith case shows how complex stay of proceedings rules can be. As Licensed Insolvency Trustees in the Greater Toronto Area, we help by:

Explaining how stays apply to your specific situation
Timing filings for maximum protection
Handling creditor communications
Ensuring compliance with legal requirements

Avoiding Common Mistakes

Many people misunderstand stay protection. We’ve seen clients assume bankruptcy solves everything, only to face continued problems with:

Housing costs
Post-filing obligations
Non-dischargeable debts

FAQs About Stay of Proceedings

Does a stay of proceedings stop all creditors?

No. While most creditors must stop collection, some exceptions exist. Secured creditors, family support, and certain government actions may continue.

Can I get evicted during bankruptcy?

Yes, especially if eviction proceedings started before bankruptcy or if you don’t pay current rent.

How quickly does stay protection start?

Stay of proceedings protection begins immediately upon filing bankruptcy or a consumer proposal.

What happens if I violate the stay conditions?

Courts can lift the stay, removing your protection and allowing creditor actions to resume.

Getting Help with Stay of Proceedings Issues

If you’re facing debt problems and potential eviction, don’t wait. Early action often provides better options and stronger stay of proceedings protection. The longer you wait, the fewer options you might have. Contact a Licensed Insolvency Trustee today for a free consultation.

At Ira Smith Trustee & Receiver Inc., we’ve helped Ontario residents and companies overcome their debt challenges, starting with honest, professional advice. We’ll review your complete financial situation, explain all your options, and help you choose the best path forward.

Remember: you don’t need to pay someone to access professional help. Our help starts with a free consultation and continues with transparent, regulated services designed to get you back on your financial feet.

You’re not alone in this. There’s a path forward, and it starts with reaching out for the right kind of help. Take that step—you deserve it. If you’re a GTA resident dealing with overwhelming debt, don’t wait for your credit situation to get worse. As a licensed insolvency trustee serving Toronto, Mississauga, Brampton, Markham, and surrounding areas, I’m here to help you understand your options.

Remember: Your current financial situation doesn’t define your future. With the right help and information, you can overcome debt challenges.

As a licensed insolvency trustee serving the Greater Toronto Area, I encourage consumers and business owners to view financial difficulties not as failures but as challenges that can be addressed with proper guidance. By understanding the warning signs of insolvency and seeking professional advice early, many people and businesses can find a path forward – whether through restructuring, strategic changes, or in some cases, an orderly wind-down that protects their future opportunities.

Remember: The earlier you seek help for company insolvency concerns, the more options you’ll have.

If you or someone you know is struggling with too much debt, remember that the financial restructuring process, while complex, offers viable solutions with the right guidance. As a licensed insolvency trustee serving the Greater Toronto Area, I help entrepreneurs understand their options and find a path forward during financial challenges.

At the Ira Smith Team, we understand the financial and emotional components of debt struggles. We’ve seen how traditional approaches often fall short in today’s economic environment, so we focus on modern debt relief options that can help you avoid bankruptcy while still achieving financial freedom.

The stress of financial challenges can be overwhelming. We take the time to understand your unique situation and develop customized strategies that address both your financial needs and emotional well-being. There’s no “one-size-fits-all” approach here—your financial solution should be as unique as the challenges you’re facing.

If any of this sounds familiar and you’re serious about finding a solution, reach out to the Ira Smith Trustee & Receiver Inc. team today for a free consultation. We’re committed to helping you or your company get back on the road to healthy, stress-free operations and recover from financial difficulties. Starting Over, Starting Now.

The information provided in this blog is intended for educational purposes only. It is not intended to constitute legal, financial, or professional advice. Readers are encouraged to seek professional advice regarding their specific situations. The content should not be relied upon as a substitute for professional guidance or consultation. The author, Ira Smith Trustee & Receiver Inc., and any contributors do not assume any liability for any loss or damage.

Brandon Blog Post

LAURENTIAN UNIVERSITY FACING INSOLVENCY MAKES STARTLING CCAA NEWS FILING FOR CREDITOR PROTECTION

Post author By Brandon Smith
Post date February 8, 2021

We hope that you and your family are safe, healthy, and secure during this coronavirus pandemic.

Ira Smith Trustee & Receiver Inc. is absolutely operational and Ira, in addition to Brandon Smith, is readily available for a telephone consultation or video meeting.

If you would prefer to listen to the audio version of this Brandon Blog, please scroll to the bottom and click play on the podcast.

UPDATE MAY 5, 2021: SEE OUR UPDATED BLOG PUBLISHED TODAY ON THE LAURENTIAN UNIVERSITY INSOLVENCY CREDITOR PROTECTION PROCEEDINGS STATUS – CLICK HERE FOR THE UPDATE

Laurentian University introduction

Laurentian University is facing a cash crisis and has filed for creditor protection. The Ontario university states that the application under the federal Companies’ Creditors Arrangement Act (CCAA) is intended to permit the university to continue running day-to-day operations during restructuring.

The Sudbury, Ontario school is not shutting down and will continue to provide services for students. It states it will keep normal operations and keep classes running. In this Brandon Blog, I talk about what creditor protection in the Canadian context is and why Laurentian University did so.

***Laurentian University: What is creditor protection***?

In its simplest terms, creditor protection is the protection you get when you start a proceeding with a filing under either the Bankruptcy and Insolvency Act (Canada) (BIA) or the CCAA. Under the BIA, an individual or company gets that protection in either a consumer or corporate bankruptcy. This safeguard is also obtained by filing under the restructuring proposal provisions of the BIA. A company safeguards itself when it files for restructuring under the CCAA.

Once a filing is done, without getting special permission from the court, none of your creditors can start or continue legal action against the person or the company for the repayment of a debt or for any enforcement action against its assets.

Laurentian University, therefore, received its sheltering once it made its filing under the CCAA. When using this statute, it can also be called CCAA protection.

Below is the section titled “How the Laurentian University restructuring story begins”. I discuss its particular issues leading up to the need to file.

Laurentian University: What is a stay period?

The “time out” that a person or business gets from its creditors is called a stay period (Stay of Proceedings). Upon the agreement of the court to the initial filing, the result is that the court will issue an Order giving the company an initial 30 days of protection from creditors to allow for the preparation of the restructuring proposal called a Plan of Arrangement.

This initial stay can be extended by the court, as long as the judge is convinced that the company is acting in good faith and working expeditiously in sorting through the myriad of issues stopping it from putting together its Plan of Arrangement.

Laurentian University: What does CCAA mean

The CCAA is a Canadian federal law that helps companies in financial difficulties emerge from its difficulties. The company begins its reorganization proceeding with its application to the court and files for creditor protection to avail itself of the process for a company and its creditors to come to an agreement on how to reorganize the company’s debt, while the company continues to operate normally and pay amongst other things, wages to its employees.

One of the biggest advantages of the CCAA is that it allows a business to “hold the fort” while the creditors and the company work out an agreement that will hopefully get the company back on its feet. While operating in this fashion, company management remains in control of running the business. The company does not hand over its assets to a licensed insolvency trustee (Trustee). Rather, the Trustee is appointed by the court to act as Monitor.

As the title sounds, the role of the Monitor is that of the neutral court officer working with the company. The duties of the Monitor include:

overseeing and providing supervision of the company’s affairs;
assisting in the negotiations with creditors;
helping with the drafting of the Plan of Arrangement for describing what the restructuring process will be;
report regularly to the court on the progress and details of the restructuring administration, and ultimately,
conducting the meetings of the various classes of creditors where voting on the Plan of Arrangement takes place.

Although the CCAA is unique to the country of Canada, other countries have similar restructuring legislation. The most famous is probably Chapter 11 of the US Bankruptcy Code. This is when you normally hear the term “bankruptcy protection“.

Laurentian University files to reorganize university finances

Last Fall, Laurentian University recognized it was in financial trouble. On October 1, 2020, it issued a press release advising that it has financial challenges brought on by the global COVID-19 pandemic and its pre-existing structural deficit. It also announced at that time that it hired Ernst & Young as financial advisors to assist in a further review of its detailed financial results, budgets, and our various initiatives to help identify and analyze any additional opportunities for cost savings or improvement.

On February 1, 2021, facing insolvency, Laurentian University took the step to begin its insolvency proceeding under the CCAA in order to come up with a formal restructuring plan. Since it is in the early stages of the insolvency administration, the actual plan has not yet been developed as Laurentian University needs time to come up with the proper plan. It will be one of many future events I will keep my eye on for you.

From my review of the filing documents, I can tell you what the story is so far.

How the Laurentian University restructuring story begins

“We are working with all stakeholders to ensure a smooth process for students,” said Peter Baxter, the university’s provost and vice-president, academic.”

Who would’ve thought that universities, which are supposed to be institutions of higher learning, would actually run into financial problems and put their stakeholders at risk? But that’s exactly what happened and is the current situation with the Laurentian University insolvency in Sudbury, Ontario. I guess the place was not run by any of the finance profs! It is obviously a stressful time for all students, staff, faculty, and creditors.

Dr. Robert Haché, the President and Vice-Chancellor of the Laurentian University of Sudbury, swore the necessary affidavit on January 30, 2021, in support of Laurentian’s court application for an Initial Order to commence CCAA proceedings. In his affidavit, Dr. Haché stated:

Laurentian’s financial issues were first determined as early as 2008-09 when a prior administration gave a budget to the Board that would not be balanced for the 2008-2009 academic year and showed little to no improvement for the future financial prospects of the university absent any revised processes. The budget was approved, but the Board expected the financial situation to be fixed as a top priority item.
A Plan for Regaining Sustainability at Laurentian was presented to the school’s Board on December 18, 2008, and again on February 20, 2009. The Board approved the implementation of the plan, expecting to regain financial health over a three-year period.
Starting in 2014, Laurentian undertook a $64 million Campus Modernization Project for the construction of approximately 250,000 sq. ft. of classrooms, research, study as well as a public area.
The Campus Modernization Project involved Laurentian incurring a substantial amount of long-term debt (approximately $40 million) to pay for the construction of buildings and facilities to modernize the campus in order to accommodate its historical growth and fuel the projected enrolment growth. The university elected to defer repayment of the principal amounts borrowed until after construction was completed, leading to the accrual of further interest.
When the Board approved the 2016-17 operating budget, LU forecasted operational deficits continuing through 2021-22 leading to an accumulated operational deficit of greater than $43 million.
With the exception of the modest growth experienced in 2020, enrolment has declined each year from 2015 to 2018 and tuition fees remain low, while labour and debt servicing costs have grown substantially.
The 10% tuition reduction and tuition freeze ordered by the Province of Ontario beginning in 2019.
Laurentian’s academic costs are generally higher as a percentage of total costs than other Ontario universities.
Not re-evaluating over the last decade its programs to make sure it is focusing on those the marketplace of students deem relevant and required.
The COVID-19 pandemic has made all these issues worse.

From reading his sworn affidavit, I would use one simple word to describe what has led to the Laurentian University insolvency – MISMANAGEMENT! Dr. Haché joined Laurentian University in July 2019. So he has only been involved in this mess for the last 19 months.

What Laurentian University reports its immediate plans are by making this CCAA filing

Laurentian University reported that as at April 30, 2020, it had $358.5 million in assets based on generally accepted accounting principles. Of that total, only $33.2 million is either liquid or near-liquid. As at the same date, its liabilities are:

Line of credit $14.4 million
Short-term loan $1.4 million
Accounts payable and accrued liabilities $22.4 million
Accrued vacation pay $1.8 million
Deferred revenue $1.0 million
Current portion of long-term debt $2.7 million
Long-term debt $89 million
Employee future benefits liabilities $20.8 million
Deferred contributions $38.6 million
Deferred capital contributions $129.9 million

This adds up to $322 million. The balance sheet balances because the remainder represents either restricted capital or special purpose endowments.

Laurentian University advised the court that it intends to come back requesting an Amended and Restated Initial Order. Right now, Laurentian has the benefit of the Stay of Proceedings and will not be making any payments on any outstanding amounts owing as of February 1, 2021.

Among other things, the motion in respect of the Amended and Restated Initial Order will seek the following additional relief:

extending the Stay of Proceedings to April 30, 2021;
suspending Laurentian’s requirement to make certain special payments in respect of its defined benefit pension plan, pending further Order of the Court;
suspending Laurentian’s need to reply to requests for information received under the Freedom of Information and Protection of Privacy Act (Ontario) during the Stay of Proceedings, nunc pro tunc to February 1, 2021;
the appointment of a mediator, as an officer of the Court and a neutral third party to undertake a mediation of various issues under the supervision of this Court, on an urgent basis;
approving Laurentian’s request for a debtor-in-possession credit facility (the “DIP Facility”) borrowing authority up to the principal amount of $25 million to finance its working capital requirements and other general corporate purposes, post-filing expenses and costs during the Stay of Proceedings.

The court has now declared that Laurentian University is insolvent. I will be following this CCAA administration and will write more blogs on material points of special interest as this restructuring winds its way through the court.

Laurentian University summary

I hope you enjoyed the Laurentian University Brandon Blog post. If you are concerned because you or your business are dealing with substantial debt challenges and you assume bankruptcy is your only option, call me. It is not your fault that you remain in this way. You have actually been only shown the old ways to try to deal with financial issues. These old ways do not work anymore.

The Ira Smith Team utilizes new modern-day ways to get you out of your debt difficulties while avoiding bankruptcy. We can get you the relief you need and so deserve.

The tension put upon you in such a time of uncertainty is big. We know your discomfort factors. We will check out your entire situation and design a new approach that is as unique as you and your problems; financial and emotional. We will take the weight off of your shoulders and blow away the dark cloud hanging over you. We will design a debt settlement strategy for you. We know that we can help you now.

We understand that people and businesses facing financial issues need a realistic lifeline. There is no “one solution fits all” method with the Ira Smith Team. Not everyone has to file bankruptcy in Canada. The majority of our clients never do. We help many people and companies stay clear of bankruptcy.

That is why we can establish a new restructuring procedure for paying down debt that will be built just for you. It will be as one-of-a-kind as the economic issues and discomfort you are encountering. If any one of these seems familiar to you and you are serious about getting the solution you need, Contact the Ira Smith Trustee & Receiver Inc. group today.

Call us now for a no-cost consultation.

We will get you or your business back up driving to healthy and balanced trouble-free operations and get rid of the discomfort factors in your life, Starting Over, Starting Now.

We hope that you and your family are safe, healthy, and secure during this coronavirus pandemic.

Ira Smith Trustee & Receiver Inc. is absolutely operational and Ira, in addition to Brandon Smith, is readily available for a telephone consultation or video meeting.

Tags bankruptcy and insolvency act canada, bankruptcy protection, CCAA, classes of creditors, Companies’ Creditors Arrangement Act, covid-19 pandemic, Dr. Robert Haché, Ernst & Young, initial order, Laurentian University, licensed insolvency trustee, plan of arrangement, protection from creditors, restructuring proposal, stay of proceedings, what does ccaa mean, what is a stay period, what is creditor protection

Brandon Blog Post

HOW BANKRUPTCIES WORK IN CANADA: 5 NEW CANADIAN INSOLVENCY LAW AMENDMENTS

Post author By Brandon Smith
Post date November 11, 2019

If you would prefer to listen to the audio version of this how bankruptcies work in Canada Brandon’s Blog, please scroll down to the bottom of the page and click on the podcast

Canadian bankruptcies laws

Last week I wrote about amendments to Canadian insolvency law for intellectual property rights in my Brandon’s Blog INSOLVENCY LAW CANADA AMENDMENTS FOR INTELLECTUAL PROPERTY RIGHTS In addition to the intellectual property rights amendments, other amendments affecting how bankruptcies work in Canada. They were enacted as of November 1, 2019. They too were part of the changes announced in the Canadian 2019 Budget.

Corporate bankruptcies Canada

Most of the amendments affect not just corporate bankruptcies. Receiverships and corporate financial restructuring are likewise affected. Even the operation of solvent companies is also affected. The amendments were made to the Bankruptcy and Insolvency Act (R.S.C., 1985, c. B-3) (BIA), Companies’ Creditors Arrangement Act (R.S.C., 1985, c. C-36) (CCAA) and the Canada Business Corporations Act (R.S.C., 1985, c. C-44). I will focus on the changes to the BIA and CCAA.

The BIA and the CCAA modifications in the Budget Implementation Act, 2019, No. 1, are planned to boost retired life protection by making the insolvency treatment fairer and much more clear. In the legislation, the amendments fall under the heading “Enhancing Retirement Security”.

This issue remained in the news over the past two years. High profile insolvency situations such as Sears Canada and U.S. Steel Canada brought this matter to the forefront. I wrote a few blogs on the topic of proposals to change the BIA and CCAA. The proposals were meant to supply protection to senior citizens. This consisted of private members’ bills introduced by Hamilton Mountain NDP MP Scott Duvall, Bloc Québécois MP Marilène Gill and Senator Art Eggleton, P. C.

None of their Bills ever came close to being enacted. Rather, the Liberal government made some changes. Only time will tell if the changes I describe below will accomplish the stated goal of enhancing retirement security.

Insolvency and bankruptcy code amendments – BIA

The BIA amendments will apply to bankruptcy, receivership and BIA financial restructurings done under the Proposal section of the BIA. The amendments are aimed at several areas. All the insolvency amendments are for insolvency proceedings beginning on or after November 1, 2019.

1. Good faith

Section 4.2 of the BIA is amended by adding a good faith provision section(4.2)(1). The new language states that any interested person in any type of process under the BIA must act in good faith relative to those proceedings. New subsection 4.‍2(2) codifies a power for the Court. It now states that if the court is satisfied that an interested individual fails to act in good faith, on application by any other interested party, the Court might make any kind of order that it thinks is proper in the circumstances.

I would have hoped that acting in good faith was always a given. Previously, the Court had wide discretion in insolvency proceedings to make an order that it believed to be just and appropriate. I am not sure this new language adds much to “enhancing retirement security”, but at least now it is codified.

2. Registered disability savings plan

Before Budget Canada 2019, there was a gap when it came to a registered disability savings plan (RDSP). The gap was that unlike an RRSP or RRIF, there was no exemption for an RDSP in how bankruptcies work in Canada.

Now Paragraph 67(1)‍(b.‍3) of the BIA is amended to include the same exemption for an RDSP that an RRSP and RRIF enjoy. That is, the amounts in any of these funds are now exempt from seizure in a bankruptcy apart from property added to any such plan or fund in the twelve-month period before the date of bankruptcy.

3. Director liability – Inquiry into dividends, redemption of shares or compensation

Section 101(1) of the BIA has been amended. It now deals with certain transactions that 1 year before the corporation went bankrupt. The time period is within the day that is one year prior to the date of the initial bankruptcy event and ending on the date of the bankruptcy both such dates included. If the corporation had:

paid a dividend, aside from a stock dividend;
redeemed or acquired for cancellation any one of its shares of the company’s capital stock; or
has paid termination pay, severance pay or incentive or other benefits to a director, officer or any person that manages or controls the business

the Court may, on the application of the licensed insolvency trustee (Trustee), inquire into the transaction to find out whether it took place at a time when the firm was insolvent or whether it made the firm bankrupt.

If a transaction referred to above has actually occurred, the Court can give judgment to the Trustee against the directors of the firm, jointly as well as severally, or individually as appropriate in the circumstances.

The amount of the pay or benefits, with interest on the amount, that has not been paid back to the company if the Court discovers that the payment of the pay or benefit:

occurred at a time when the company was insolvent or it made the corporation bankrupt;
was notably over the reasonable market price of the consideration gotten by the company;
was made outside the common course of business

and the directors did not have reasonable grounds to think that the payment:

took place when the firm was not insolvent or would not render the firm insolvent;
was not conspicuously over the fair market value of the consider obtained by the corporation; and
was made in the ordinary course of business.

Interestingly, the new statute also states that a judgment will not be made against or be binding on a director who had protested against the payment of the pay or benefits and had, therefore, vindicated himself or herself under the relevant corporate legislation from any kind of resulting obligation.

No doubt we will only learn how effective this additional liability of directors provision will be after several court cases. Presumably, this amendment to the statute will provide extra food for thought for the insurance companies providing director and officer liability coverage.

Insolvency proceedings under the CCAA

The CCAA covers larger company financial restructuring. In addition to amendments to the CCAA to mirror the BIA amendments discussed above, there were also a couple of other changes made.

4. Initial application

Prior to November 1 CCAA filings, the company was given an initial stay of proceedings for 30 days. Now, for filings November 1, 2019, and after, this initial stay period has been reduced to 10 days.

5. Relief reasonably necessary

An initial order made or during the 10-day initial application stay period will be limited to alleviation that is fairly required for the continued operations of the borrower business in the regular course, but no extra relief will be granted. This narrowing of relief during the initial order period means that the Company cannot ask for all sorts of extra relief outside of the normal course of business.

In order to attempt to get extra relief, the Company will have to make a motion to the Court on notice to any affected parties. The Company will not be able to pack it into an initial order and force affected parties who did not receive notice to have to come to Court under the comeback clause. This was the case before November 1, 2019.

Most times in a CCAA restructuring, it is necessary for the Company’s survival to get debtor-in-possession financing. When such financing is available, it usually comes with very onerous terms. To avoid essentially keeping all of the Company’s assets out of reach by using such financing, the CCAA has been amended. It says that when applying for the initial order or during the initial stay period, no order shall be made unless the court is pleased that the terms of the loan are restricted to what is reasonably necessary for the continued operations of the debtor firm in the ordinary course of business during that initial stay period duration.

In this way, Parliament has tried to put the brakes on wide-sweeping initial orders that have everything including the kitchen sink in them. Parliament wants to have the initial orders contain only what is reasonably necessary to keep the Company’s operations going until everyone is back in Court all lawyered up.

It will be very interesting to see what Court decisions come from all of these new amendments to the Canadian insolvency laws.

Summary

I hope you enjoyed this how bankruptcies work in Canada Brandon’s Blog on the other BIA and CCAA insolvency amendments effective November 1, 2019. Are you or your company in need of financial restructuring? The financial restructuring process is complex. The Ira Smith Team understands how to do a complex corporate restructuring. However, more importantly, we understand the needs of the entrepreneur. You are worried because your company is facing significant financial challenges. Your business provides income not only for your family. Many other families rely on you and your company for their well-being.

The stress placed upon you due to your company’s financial challenges is enormous. We understand your pain points. We look at your entire situation and devise a strategy that is as unique as you and your company’s problems; financial and emotional. The way we deal with this problem and devise a corporate restructuring plan, we know that we can help you and your company too.

We know that companies facing financial problems need a realistic lifeline. There is no “one solution fits all” approach with the Ira Smith Team. That is why we can develop a company restructuring process as unique as the financial problems and pain it is facing. If any of this sounds familiar to you and you are serious in finding a solution, contact the Ira Smith Trustee & Receiver Inc. team today.

Call us now for a free consultation. We will get your company back on the road to healthy stress-free operations and recover from the pain points in your life, Starting Over, Starting Now.

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Tags Bankruptcy and Insolvency Act, BIA, canadian bankruptcies laws, canadian insolvency law amendments, CCAA, Companies’ Creditors Arrangement Act, corporate restructuring, director liability, good faith, how bankruptcies work in canada, initial appliction, initial order, Insolvency and bankruptcy code amendments, Ira Smith Trustee, rdsp, registered disability savings plan, stay of proceedings

Brandon Blog Post

BANKRUPTCY ACT CANADA: ARE YOU REALLY PREPARED FOR IT?

Post author By Brandon Smith
Post date July 10, 2019

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Introduction

No person wishes to go make a filing under the Bankruptcy and Insolvency Act (R.S.C., 1985, c. B-3) (Bankruptcy Act Canada), however occasionally it is inevitable. You might think that people who file are just those that are careless with their finances. However, with most of the people I see, it is usually an event outside of their control that pushes them over the edge.

In personal bankruptcy, things such as illness, divorce, job loss, unanticipated catastrophes, identity theft and fraud are many times the causes of insolvency. Of course, lack of proper budgeting, overspending and inappropriate uses of credit are also involved. In corporate insolvency, the #1 cause always seems to track back to management.

Insolvency filings happen every year. In 2018, a total amount of 128,846 insolvency filings were made with the Office of the Superintendent of Bankruptcy (OSB). This is 2.4% more from 2017. Consumer insolvency filings increased 2.5% (125,266 filings), while company filings dropped 0.8% to 3,580.

At the very same time, people choosing to avoid bankruptcy by filing a proposal continued increasing in 2018, bringing this number to a brand-new level. Proposals represented 52.6% of consumer filings in 2017. In 2018, they expanded by 6.6% to 56% of all personal filings.

Are you considering a Bankruptcy Act Canada filing, or at least speaking to a Licensed Insolvency Trustee (formerly called a trustee in bankruptcy) (Trustee)? In order to help you start your fact-finding, I want to tell you what will happen to your bank accounts, retirement accounts and your other important financial funds. Understanding what to anticipate can assist you to stay clear of some pricey blunders.

Bankruptcy or (consumer) proposal

Being insolvent is that you are not able to settle your financial debts. People with severe financial problems can make Bankruptcy Act Canada filing by filing either for bankruptcy, a consumer proposal or Division I proposal.

Proposals are official methods controlled by the Bankruptcy Act Canada for personal filings. Dealing with a Trustee you make a proposal to:

Pay your creditors a portion of what you owe them over a particular time period not going beyond 60 months
Extend the time you need to settle the debt
Or a mix of both

The Proposal is made via the Trustee, who uses the money in your proposal fund to pay the cost of administration and distribution to each of your creditors their pro-rata share. A consumer proposal needs to be finished within 5 years from the day of filing.

Proposal

People with severe financial problems can apply for bankruptcy. They can also try to avoid bankruptcy by using the Proposal provisions of the Bankruptcy Act Canada.

There are numerous advantages to avoiding bankruptcy. The main differences between proposals and bankruptcy are:

Unlike informal debt settlement, a Proposal produces a binding discussion forum where each of your unsecured creditors has to participate in for your debt restructuring.
You can keep your property, including your home, if you can afford to in your budget.
Lawsuits against you and enforcement proceedings, such as wage garnishments, cannot begin or continue.
In a successfully completed Proposal, you do not need to file for bankruptcy.

Keep in mind that financial institutions have “set-off” legal rights, implying that if you declare bankruptcy or file for bankruptcy when you’re behind in payments to them, they will take the funds in your accounts to try to cover all or some of what you owe them. This is notwithstanding that there is a stay of proceedings once a Bankruptcy Act Canada filing takes place and such an offset really should not take place.

So if you are thinking of filing either for bankruptcy or a proposal, I want you to be prepared for what might happen to your financial assets.

Your bank account

In a bankruptcy, the cash in your bank account is a property which must be paid over to the Trustee. Upon your filing, the Trustee will put all your banks on notice to provide the funds in any accounts maintained with them to the Trustee. As noted above, the bank may very well offset cash in your savings or chequing account against the money you may owe them, including credit card debt.

In a Proposal, you do not lose control of the money in your bank accounts. Rather, they are considered by the Trustee in formulating the type of Proposal you should offer your creditors. Remember, your Proposal must offer your creditors a better alternative than your bankruptcy would. However, even though there is a stay of proceedings invoked once you file your Proposal, it is not uncommon for a bank where you maintain an account and to whom you owe money, to take the money in your account and offset it against what you owe them.

So the moral of this story is that you are best to have bank accounts at financial institutions to whom you do not owe any money.

In a bankruptcy, your RRSP, RRIF or DPSP are excluded from seizure. However, the Trustee is entitled under the Bankruptcy Act Canada to receive the equivalent to any amounts contributed to these accounts in the 12 months preceding your filing date. In a Proposal, this 12-month amount must be included by the Trustee in the calculation of what amount your Proposal should offer your creditors.

Canada Pension Plan (CPP) and Old Age Security income (OAS)

Canada Revenue Agency (CRA) is the only one permitted to garnish your CPP earnings if you have an unpaid personal income tax. By filing either for bankruptcy or a Proposal, the stay of proceedings will be invoked and CRA will have to stop the garnishment of your CPP and you will get the CPP payments you are qualified for.

However, the earnings obtained from CPP and OAS will certainly be taken into account by the Trustee in determining if you have any surplus income payment obligation in bankruptcy. In a Proposal, that amount also has to be considered in developing your Proposal.

Tax-Free Savings Account (TFSA), Registered Education Savings Plan (RESP) and other non-registered account investments

In a bankruptcy, just like any other non-exempt property, the amount held in your TFSA and any other non-registered investment account must be paid to the Trustee. In a Proposal, these amounts need to be taken into account in determining what type of Proposal to make. It may very well be that these accounts are collapsed in order to help fund a Proposal.

Similarly, RESPs are not excluded in personal bankruptcy. In a Proposal, the amount must be considered as an asset in calculating how much must be offered in your Proposal to stand a chance for success.

The reason that an RESP is not excluded from seizure in bankruptcy is relatively straightforward. Your child does not acquire ownership or other entitlement to the RESP funds as parents can take possession of the funds prior to the child becoming a post-secondary school student. For that reason, it is the parents who have ownership of the funds.

Consequently, the Trustee of an insolvent mother or father that has an RESP can collapse it. If the parent in bankruptcy wants the RESP to not collapse, adequate arrangements need to be made with the Trustee for the equal amount of funds in the RESP at the filing date be paid to the Trustee for the bankruptcy estate and the bankrupt’s creditors.

Annuity revenue in bankruptcy

Annuities are agreements where you pay a company (normally an insurance company) a specific amount, in order to get regular monthly payments for a specific period of time or for the remainder of your life.

If an annuity contract is properly set up with an insurance company, it will be exempt from seizure in bankruptcy. However, the income stream it produces will be considered by the Trustee in determining whether the bankrupt person has a surplus income obligation.

Your RRIF can also be considered as an annuity as it provides a legislated stream of payments. The RRIF is exempt from seizure in a bankruptcy, other than for any contributions in the 12 months immediately prior to filing. Like an annuity, the entitlement to payments will be considered by the Trustee in doing the surplus income calculation.

In a Proposal, you don’t give up ownership of an annuity contract or RRIF, but the income must be considered in preparing a suitable Proposal.

Bankruptcy Act Canada summary

Do you have financial problems? Do you not have enough money to pay your bills in full when due?

As a Trustee, we are the only professionals licensed, authorized and supervised by the federal government to offer insolvency advice and to implement solutions under the Bankruptcy Act Canada. A consumer proposal is a federal government licensed debt settlement plan to eliminate your debt. We will help you to select what is best for you to free you from your debt issues.

Call the Ira Smith Team today so we can eliminate the anxiousness, tension, discomfort and pain from your life that your cash problems have caused. With the unique roadmap, we develop just for you, we will promptly return you right into a healthy and balanced problem-free life.

Call the Ira Smith Team today. We have generations and decades of experience helping people and companies looking for debt restructuring and a debt settlement plan to AVOID bankruptcy.

You can have a no-cost consultation so we can work with you to fix your money troubles. Call the Ira Smith Team today. This will certainly allow you to go back to a new healthy and balanced life, Starting Over Starting Now.

Tags avoid bankruptcy, avoiding bankruptcy, Bankruptcy, bankruptcy act canada, Bankruptcy and Insolvency Act, Consumer Proposal, Debt, debt settlement, Division I Proposal, informal debt settlement, insolvent, Ira Smith Trustee, licensed insolvency trustee, personal bankruptcy, proposal, stay of proceedings, trustee in bankruptcy, wage garnishment

Brandon Blog Post

CONSUMER PROPOSAL CANADA: A BLUEPRINT TO STOP BILL COLLECTORS

Post author By Brandon Smith
Post date May 27, 2019

If you would prefer to listen to the audio version of this Consumer proposal Canada Brandon’s Blog, please scroll down to the bottom and click on the podcast.

Introduction

I have written before on the concept of how a bankruptcy filing puts into place a stay of proceedings. A section of the Bankruptcy and Insolvency Act (Canada) (BIA) states that creditors are not allowed to take or continue any collection or enforcement activity against a bankrupt person or company. But what about a consumer proposal Canada? I will discuss this concept for a consumer proposal and highlight a recent case on this issue.

The federal law

Under section 69.2 (1) of the BIA, with certain limited exceptions, when a consumer proposal is filed, “…no creditor has any remedy against the debtor or the debtor’s property, or shall commence or continue any action, execution or other proceedings, for the recovery of a claim provable in bankruptcy…”.

So if the claim is one that is provable in a bankruptcy, and therefore in a consumer proposal Canada, then the creditor cannot begin or continue a lawsuit or try to enforce a judgment for the amount owed.

A recent decision from the Ontario Court confirms this law where a consumer proposal Canada will stop creditors and bill collectors from starting or continuing legal action against you.

The facts of this case

The case is Yigzaw v. Ashagrie, 2019 ONSC 2474. It is about a motion to lift the stay of proceedings to permit enforcement of an order issued against the debtors who have filed a consumer proposal.

The applicants, Philipos Yigzaw and Aster Abraham, seek to appeal an order issued by the Court on February 21, 2017 (the 2017 order). The 2017 order was gotten on the basis of summary judgment on an application started by the applicants. In their application, they sought repayment of $102,500 that they had advanced to the respondents Anaketch Ashagrie and Yilma Gari to fund a business operating under the name “Telling Roses”. They also seek an accounting of how the funds had actually been spent.

The 2017 order required Ashagrie and Gari to pay $102,500 to Yigzaw and Abraham in addition to costs of $6,250. The respondents were likewise required to provide an accounting. The Court declined to issue a certificate of pending litigation against the respondents’ residence, although a writ of execution was issued. The respondents submitted a consumer proposal the very next day.

In this enforcement motion, the applicants state that the respondents have failed to adhere to the 2017 order. They look for relief that would require Ashagrie and Gari to be examined and to pay the amount of the judgment. They also want a finding that the respondents are in contempt.

The issues for the Court to consider

The Court first considered section 69.2 (1) of the BIA I spoke about above. The Court then looked at the exception I alluded to, being Section 69.4 of the BIA.

That section says that a Court may, in certain circumstances, raise the stay to allow a creditor to pursue its rights against a debtor who has filed consumer proposal. To obtain a lifting of the stay, the creditor must persuade the Court that it is most likely to be materially prejudiced by the ongoing stay, or that lifting the stay is equitable on other grounds.

Canadian courts have held that the criteria in s. 69.4 might be fulfilled where the creditor’s debt will not be released as an outcome of the insolvency process. The types of financial obligations that are not discharged are provided in s. 178( 1) of the BIA.

They consist of a debt or obligation arising out of fraud, embezzlement, misappropriation or defalcation while acting in a fiduciary capacity as well as a debt or obligation resulting from obtaining property or services by false pretenses or fraudulent misrepresentation. Lifting of a stay is not a routine matter.

To succeed, the applicants have to show how they are most likely to be materially prejudiced by the stay, or that there are various other equitable grounds to raise it.

In a typical motion under s. 69.4, the applicant looking to lift the stay says that it needs to have the opportunity to prove that its accusations come from an activity provided in s. 178( 1) to ensure that it may obtain a judgment against the bankrupt or insolvent person. If successful, then that claim would survive the insolvency process.

In that normal case, the Court examines the creditor’s claims to identify if the debt, if confirmed, would be released as an outcome of the bankruptcy or proposal. Sometimes, the Court may also consider evidence submitted by the creditor.

This case is uncommon because the applicants have already gotten a judgment on their claim. They are not seeking to show their claim. They are looking to enforce the Order. So the concern the Court must think about is whether that Order was made according to a cause of action listed in s. 178( 1 ). The Judge did this by reviewing the claims and evidence before the Judge who gave judgment, his analysis, and the evidence filed in this motion.

The Court’s analysis

The Court quite properly pointed out that in order to be successful for the lifting of the stay, the applicants had to show that their debt was more than just one of a contract to lend money that was not repaid.

The Court said that looking at the application in the most charitable method possible, the claims could not support a finding that the respondents obtained property from the applicants by false pretenses or fraudulent misrepresentation. The applicants state that their loan was conditional on the money being used for “Telling Roses”. They do not declare that they were induced to loan money to “Telling Roses” as an outcome of any type of illegal misstatement by the respondents. Likewise, the applicants do not allege that the respondents took part in any kind of deceitful acts that induced them to loan the funds. Therefore, the exception from the discharge of the debt in s. 178( 1 )( e) of the BIA was not advanced in the applicants’ claim.

The allegations in the application also do not support a finding that the participants engaged in fraudulence, embezzlement, misappropriation or defalcation while acting in a fiduciary capacity. To meet that standard it is not nearly enough for a debt to have actually been brought on by fraud, embezzlement, misappropriation or defalcation. That form of criminal activity had to have occurred in the context of a fiduciary relationship.

The applicants do not declare that the respondents had a fiduciary obligation towards them. The relationship they explain with the respondents would not follow such a claim. Fiduciary relationships are unusual in arms’ length business transaction. The applicants additionally do not clearly affirm that the respondents participated in any type of scam at any point.

In reviewing the reasons given by the Judge who made the 2017 order, and in looking at all the other evidence in this motion, the Court found that it was anything more than one party loaning funds to another to start a business. The business never made a profit, it failed and therefore, could not repay the money.

The decision

Given these facts and the Court’s analysis, the Court found that the applicants could not succeed on their motion to lift the stay. Rather, the Court confirmed that the 2017 judgment could only be used as the basis for the applicants to file a proof of claim in the consumer proposal filed.

The basis for the 2017 order was a finding that the applicants lent the respondents the amount of $102,500. There is absolutely nothing in the underlying decision, or in the accusations in the application on which judgment was obtained, or in any evidence submitted in this motion, that puts the applicants’ claim in the classification of financial debts that are not released under s. 178( 1) of the BIA.

Therefore, the applicants’ motion to lift the stay under s. 69.4 of the BIA was rejected. They failed to show that they are likely to be materially prejudiced by the ongoing operation of the stay or that there are various other equitable factors that would lead to a conclusion to lift the stay.

Do you have too much debt?

Are you in financial distress? Do you not have adequate funds to pay your financial obligations as they come due?

If so, call the Ira Smith Team today. We have decades and generations of experience assisting people looking for financial restructuring, a debt settlement plan and to AVOID bankruptcy.

As a licensed insolvency trustee (formerly called a bankruptcy trustee), we are the only professionals accredited, acknowledged and supervised by the federal government to provide insolvency advice and to implement approaches to help you remain out of personal bankruptcy while eliminating your debts. A consumer proposal is a government-approved debt settlement plan to do that. We will help you decide on what is best for you between a consumer proposal vs bankruptcy.

Call the Ira Smith Team today so you can eliminate the stress, anxiety, and pain from your life that your financial problems have caused. With the one-of-a-kind roadmap, we develop just for you, we will immediately return you right into a healthy and balanced problem-free life.

You can have a no-cost analysis so we can help you fix your troubles. Call the Ira Smith Team today. This will allow you to go back to a new healthy and balanced life, Starting Over Starting Now.

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Tags Bankruptcy, Bankruptcy and Insolvency Act, bankruptcy and insolvency act canada section 178, bankruptcy filing, bankruptcy trustee, BIA, bill collectors, claim provable, Consumer Proposal, consumer proposal canada, consumer proposal vs bankruptcy, fraud, insolvency process, Ira Smith Trustee, licensed insolvency trustee, stay of proceedings

Corporate Debt Restructuring Key Takeaways:

1. Corporate Debt Restructuring Introduction: Navigating Financial Distress – The 2026 Business Landscape

2. What is Corporate Debt Restructuring?

3. Corporate Debt Restructuring Introduction Using The Division I Proposal: Your Business Pivot Tool

4. The Economics of 2026: Why Creditors Accept Proposals

The “30 Cents vs. 0 Cents” Logic

Creditors’ Perspective in the 2026 Economic Landscape

5. BIA Proposal vs. Bankruptcy: Distinguishing the Two Distinct Paths

6. The Corporate Debt Restructuring Process: A Strategic Roadmap for a Division I Proposal

Corporate Debt Restructuring Phase 1: Initial Assessment and Consultation

Corporate Debt Restructuring Phase 2: Filing the Notice of Intention (NOI) or the Proposal

Corporate Debt Restructuring Phase 3: The Meeting of Creditors

Corporate Debt Restructuring Phase 4: Court Approval and Implementation

7. Corporate Debt Restructuring Strategic Considerations for Your Business

Preserving Business Value and Goodwill Through Corporate Debt Restructuring

Employee Retention and Morale With Corporate Debt Restructuring

Director Liability Protection With Corporate Debt Restructuring

Negotiating with CRA (Canada Revenue Agency) In A Corporate Debt Restructuring

Secured vs. Unsecured Creditors: Differentiating Approaches

8. Brandon’s Corporate Debt Restructuring Take: Why Expertise Matters in Your Business Pivot

9. Corporate Debt Restructuring FAQ Section: Understanding Your Division I Proposal Options

Q1: What is a Division I Proposal in Ontario, Canada?

Q2: How does a BIA Division I Proposal differ from corporate bankruptcy in Canada?

Q3: Why do creditors accept corporate debt restructuring proposals instead of forcing bankruptcy?

Q4: What is the effect of a Division I Proposal on a business’s credit rating, and how can the business eventually recover?

Q5: Can I include tax debts owed to the Canada Revenue Agency (CRA) in a Division I Proposal?

Q6: How long does a Division I Proposal typically last?

10. Corporate Debt Restructuring Conclusion: Partnering with an Expert in Vaughan/GTA

What is a Stay of Proceedings?

Understanding Stay of Proceedings in Canada

The Basics of Stay Protection

How Long Does a Stay of Proceedings Last?

Stay of Proceedings and Eviction: A Real Ontario Case

The Snaith Case: What Happened

Why the Stay Didn’t Stop the Eviction

When Stay of Proceedings Doesn’t Apply

Exceptions to Stay Protection

Getting Around Stay Protection

Stay of Proceedings: What Tenants Need to Know

Can Bankruptcy Stop My Eviction?

Smart Strategies for Rent Problems

Stay of Proceedings: What Landlords Should Know

Your Rights During Tenant Bankruptcy

Working with Sheriff’s Offices

Consumer Proposals vs. Bankruptcy: Stay Differences

Consumer Proposal Stay Benefits

Bankruptcy Stay Limitations

Professional Guidance: Why You Need a Licensed Insolvency Trustee

Expert Navigation of Stay Rules

Avoiding Common Mistakes

FAQs About Stay of Proceedings

Does a stay of proceedings stop all creditors?

Can I get evicted during bankruptcy?

How quickly does stay protection start?

What happens if I violate the stay conditions?

Getting Help with Stay of Proceedings Issues

Laurentian University introduction

Laurentian University: What is creditor protection?

Laurentian University: What is a stay period?

Laurentian University: What does CCAA mean

Laurentian University files to reorganize university finances

How the Laurentian University restructuring story begins

What Laurentian University reports its immediate plans are by making this CCAA filing

Laurentian University summary

If you would prefer to listen to the audio version of this how bankruptcies work in Canada Brandon’s Blog, please scroll down to the bottom of the page and click on the podcast

Canadian bankruptcies laws

Corporate bankruptcies Canada

Insolvency and bankruptcy code amendments – BIA

Insolvency proceedings under the CCAA

Summary

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Introduction

Bankruptcy or (consumer) proposal

Proposal

Your bank account

Registered Retirement Savings Plan (RRSP), Registered Retirement Income Fund (RRIF) or Deferred Profit Sharing Plan (DPSP)

Canada Pension Plan (CPP) and Old Age Security income (OAS)

Tax-Free Savings Account (TFSA), Registered Education Savings Plan (RESP) and other non-registered account investments

Annuity revenue in bankruptcy

Bankruptcy Act Canada summary

***Laurentian University: What is creditor protection***?