Glossary

Glossary

Here are the definitions of some of the most common terms used in the field of insolvency. They are derived from the Bankruptcy and Insolvency Act.

Affidavit

“affidavit” includes statutory declaration and solemn affirmation

Assignment

“assignment” means an assignment filed with the official receiver

Bankrupt

“bankrupt” means a person who has made an assignment or against whom a bankruptcy order has been made or the legal status of that person

Bankruptcy

“bankruptcy” means the state of being bankrupt or the fact of becoming bankrupt

Bargaining agent

“bargaining agent” means any trade union that has entered into a collective agreement on behalf of the employees of a person

Claim provable in bankruptcy

“claim provable in bankruptcy” includes any claim or liability provable in proceedings under the Bankruptcy and Insolvency Act by a creditor

Collective agreement

“collective agreement”, in relation to an insolvent person, means a collective agreement within the meaning of the jurisdiction governing collective bargaining between the insolvent person and a bargaining agent

Common-law partner

“common-law partner”, in relation to an individual, means a person who is cohabiting with the individual in a conjugal relationship, having so cohabited for a period of at least one year

Common-law partnership

“common-law partnership” means the relationship between two persons who are common-law partners of each other

Corporation

“corporation” means a company or legal person that is incorporated by or under an Act of Parliament or of the legislature of a province, an incorporated company, wherever incorporated, that is authorized to carry on business in Canada or has an office or property in Canada or an income trust, but does not include banks, authorized foreign banks within the meaning of section 2 of the Bank Act, insurance companies, trust companies, loan companies or railway companies

Creditor

“creditor” means a person having a claim provable as a claim under the Bankruptcy and Insolvency Act

Current assets

“current assets” means cash, cash equivalents — including negotiable instruments and demand deposits — inventory or accounts receivable, or the proceeds from any dealing with those assets

Date of the bankruptcy

“date of the bankruptcy”, in respect of a person, means the date of

  1. the granting of a bankruptcy order against the person,
  2. the filing of an assignment in respect of the person, or
  3. the event that causes an assignment by the person to be deemed

Date of the initial bankruptcy event

“date of the initial bankruptcy event”, in respect of a person, means the earliest of the day on which any one of the following is made, filed or commenced, as the case may be:

  1. an assignment by or in respect of the person,
  2. a proposal by or in respect of the person,
  3. a notice of intention by the person,
  4. the first application for a bankruptcy order against the person, in any case
    1. referred to in paragraph 50.4(8)(a) or 57(a) or subsection 61(2), or
    2. in which a notice of intention to make a proposal has been filed under section 50.4 or a proposal has been filed under section 62 in respect of the person and the person files an assignment before the court has approved the proposal,
  5. the application in respect of which a bankruptcy order is made, in the case of an application other than one referred to in paragraph (d), or
  6. proceedings under the Companies’ Creditors Arrangement Act

Debtor

“debtor” includes an insolvent person and any person who, at the time an act of bankruptcy was committed by him, resided or carried on business in Canada and, where the context requires, includes a bankrupt

Director

“director” in respect of a corporation other than an income trust, means a person occupying the position of director by whatever name called and, in the case of an income trust, a person occupying the position of trustee by whatever name called

Eligible financial contract

“eligible financial contract” means an agreement of a prescribed kind

Executing officer

“executing officer” includes a sheriff, a bailiff and any officer charged with the execution of a writ or other process under the Bankruptcy and Insolvency Act or any other Act or proceeding with respect to any property of a debtor

Financial collateral

“financial collateral” means any of the following that is subject to an interest, or in the Province of Quebec a right, that secures payment or performance of an obligation in respect of an eligible financial contract or that is subject to a title transfer credit support agreement:

  1. cash or cash equivalents, including negotiable instruments and demand deposits,
  2. securities, a securities account, a securities entitlement or a right to acquire securities, or
  3. a futures agreement or a futures account

Income trust

“income trust” means a trust that has assets in Canada if

  1. its units are listed on a prescribed stock exchange on the date of the initial bankruptcy event, or
  2. the majority of its units are held by a trust whose units are listed on a prescribed stock exchange on the date of the initial bankruptcy event

Insolvent person

“insolvent person” means a person who is not bankrupt and who resides, carries on business or has property in Canada, whose liabilities to creditors provable as claims under the Bankruptcy and Insolvency Act amount to one thousand dollars, and

  1. who is for any reason unable to meet his obligations as they generally become due,
  2. who has ceased paying his current obligations in the ordinary course of business as they generally become due, or
  3. the aggregate of whose property is not, at a fair valuation, sufficient, or, if disposed of at a fairly conducted sale under legal process, would not be sufficient to enable payment of all his obligations, due and accruing due

Legal counsel

“legal counsel” means any person qualified, in accordance with the laws of a province, to give legal advice

Locality of a debtor

“locality of a debtor” means the principal place

  1. where the debtor has carried on business during the year immediately preceding the date of the initial bankruptcy event,
  2. where the debtor has resided during the year immediately preceding the date of the initial bankruptcy event, or
  3. in cases not coming within paragraph (a) or (b), where the greater portion of the property of the debtor is situated

Official receiver

“official receiver” means an officer appointed under subsection 12(2)

Person

“person” includes a partnership, an unincorporated association, a corporation, a cooperative society or a cooperative organization, the successors of a partnership, of an association, of a corporation, of a society or of an organization and the heirs, executors, liquidators of the succession, administrators or other legal representatives of a person

Property

“property” means any type of property, whether situated in Canada or elsewhere, and includes money, goods, things in action, land and every description of property, whether real or person­al, legal or equitable, as well as obligations, easements and every description of estate, interest and profit, present or future, vested or contingent, in, arising out of or incident to property

Proposal

“proposal”, means

  1. in any provision of Division I of Part III, a proposal made under that Division, and
  2. in any other provision, a proposal made under Division I of Part III or a consumer proposal made under Division II of Part III

and includes a proposal or consumer proposal, as the case may be, for a composition, for an extension of time or for a scheme or arrangement

Secured creditors

“secured creditor” means a person holding a mortgage, hypothec, pledge, charge or lien on or against the property of the debtor or any part of that property as security for a debt due or accruing due to the person from the debtor, or a person whose claim is based on, or secured by, a negotiable instrument held as collateral security and on which the debtor is only indirectly or secondarily liable, and includes

  1. a person who has a right of retention or a prior claim constituting a real right, within the meaning of the Civil Code of Quebec or any other statute of the Province of Quebec, on or against the property of the debtor or any part of that property, or
  2. any of
    1. the vendor of any property sold to the debtor under a conditional or instalment sale,
    2. the purchaser of any property from the debtor subject to a right of redemption, or
    3. the trustee of a trust constituted by the debtor to secure the performance of an obligation,

if the exercise of the person’s rights is subject to the provisions of Book Six of the Civil Code of Quebec entitled Prior Claims and Hypothecs that deal with the exercise of hypothecary rights

Shareholder

“shareholder” includes a member of a corporation — and, in the case of an income trust, a holder of a unit in an income trust — to which the Bankruptcy and Insolvency Act applies

Superintendent

“Superintendent” means the Superintendent of Bankruptcy appointed under subsection 5(1)

Time of the bankruptcy

“time of the bankruptcy”, in respect of a person, means the time of

  1. the granting of a bankruptcy order against the person,
  2. the filing of an assignment by or in respect of the person, or
  3. the event that causes an assignment by the person to be deemed

Title tranfer credit support agreement

“title transfer credit support agreement” means an agreement under which an insolvent person or a bankrupt has provided title to property for the purpose of securing the payment or performance of an obligation of the insolvent person or bankrupt in respect of an eligible financial contract

Transfer at undervalue

“transfer at undervalue” means a disposition of property or provision of services for which no consideration is received by the debtor or for which the consideration received by the debtor is conspicuously less than the fair market value of the consideration given by the debtor

Trustee or Licensed trustee

“trustee” or “licensed trustee” means a person who is licensed or appointed under the Bankruptcy and Insolvency Act

Need advice?
We will reply within 24 hours or on the next business day.