Chartered Insolvency and Restructuring Practitioner (CIRP) – Another name for this professional is a Licensed Insolvency Trustee. This is the only person licensed by the Superintendent of Bankruptcy to administer proposals and bankruptcies. The Trustee represents your creditors and is an officer of the court. The Trustee can give you information and advice about both the proposal and bankruptcy processes to make sure your rights, as well as those of the creditors, are respected.
Consolidation loan – Taking out one loan to pay off many other debts. This is often done to secure a lower interest rate, extending the term of the payments, or simply for the convenience of servicing only one loan.
Consumer Proposal – An agreement between a person and his/her creditors whereby the person pays only a portion of his debts back to the creditors, with the remaining amount being forgiven. For more information on proposals, please see the detailed information in our website.
Co-signer – Someone that has guaranteed or co-signed a loan on your behalf. Under a bankruptcy, the person who co-signed on your behalf remains liable for the loan in full even if you decide to go bankrupt.
Creditor – A person or company to whom you owe money.
–Preferred Creditors – Creditors that are owed employment income or some specific rental arrears.
–Secured creditors – Creditors who have taken some measure to protect themselves by taking a mortgage, lien or loan against your property, i.e. the bank who holds a mortgage against your home.
–Unsecured creditors – Creditors who have no security against your assets, i.e a credit card company.
Debtor – A debtor is anyone who owes money to a person or a company for something they purchased.
Discharge – The elimination of your obligation to repay your debts and your release from bankruptcy.
Equity – Is the current market value of an asset less any registered loans or mortgages against the asset, less any reasonable selling costs.
Estate Manager – A qualified administrator who will guide you through the bankruptcy process from the initial consultation to your discharge.
Garnishment – A garnishment is when a creditor obtains the right to seize a debtor’s property, money, or earnings in order to pay the debt.
Income and Expense Report – A report to be filed monthly showing all of your sources of income and all living expense incurred during the month. This helps the Trustee decide if you have any surplus income.
Insolvent – A person who owes at least $1,000 and cannot pay their debts as they become due, or anyone whose debts are greater than the value of their assets.
Inspector – Inspectors are appointed by the creditors to represent their best interest during a proposal or bankruptcy. Inspectors are expected to assist the trustee by virtue of their experience and are required to supervise certain aspects of the trustee’s administration.
Licensed Insolvency Trustee – This is the only professional licensed by the Superintendent of Bankruptcy to administer proposals and bankruptcies. The Trustee represents your creditors and is an officer of the court. The Trustee can give you information and advice about both the proposal and bankruptcy processes and make sure that your rights, as well as those of the creditors, are respected.
Mediation – A method of resolving conflict between two or more individuals during a bankruptcy. The Mediator is an impartial, independent person who will help the parties settle their dispute instead of going to court. Mediation can only be used to resolve two types of disputes being (1) surplus income issues; and (2) conditions of discharge.
Mortgage – A type of secured debt whereby the lender takes collateral against the property to guarantee the collection of their money.
Official Receiver – This is a federal government employee in the Office of the Superintendent of Bankruptcy and an officer of the court with specific duties under the Bankruptcy and Insolvency Act.
Office of the Superintendent of Bankruptcy – This is the governing body that oversees the bankruptcy and proposal process.
Personal Property Security Act (PPSA) – This Act sets out the rules on how to take security on assets to protect the monies owed to you. The Registry can also be used to ensure that there are no liens or encumbrances of any kind onassets that you are purchasing, for example, a vehicle.
Post-Bankruptcy Income Tax Return – The post-bankruptcy return is an income tax return filed for someone who has gone bankrupt during the year. It covers only income and deduction information from the date of your bankruptcy to the last day in the calendar year.
Pre-Bankruptcy Income Tax Return – The pre-bankruptcy return is an income tax return filed for someone who has gone bankrupt during the year. It covers only income and deduction information from the first day of the year to the day before the date of your bankruptcy.
Property – Another name for “asset” which are items that you own anywhere in the world, regardless of whether you owe any money against them i.e. money in the bank, real estate such as land, home, cottage, vehicles, jewelry, and any financial gains from pending legal actions.
Stay of Proceedings – Upon filing for bankruptcy, any legal actions and any creditors are stayed or stopped which prevents and further action against you.
Student Loans – A loan made for a student under the Canada Student Loans Act or Student Financial Assistance Act. Student loan debt will be eligible for discharge in bankruptcy if seven years have passed since the former student ceased to be a full or part time student.
Superintendent of Bankruptcy – A federally appointed official who oversees the administration of the Bankruptcy and Insolvency Act in Canada.
Surplus Income – The Bankruptcy and Insolvency Act sets out the amount that a bankrupt can earn during the course of the bankruptcy, giving considerations to a number of personal and family factors. If the Bankrupt earns more than this guideline, one half of the surplus income may be required to be paid to the Trustee to distribute to the creditors before the Bankrupt can be discharged from bankruptcy.
Windfall – A windfall is also called “after acquired property”. You are required to give all windfalls, such as lottery winnings and inheritances, received during the period of your bankruptcy, to the Trustee for distribution to your creditors.