What Are the Different Types of Bankruptcy Administrations?
For those us who watch American television programs, we are likely more familiar with the terms Chapter 7 and Chapter 13, with regard to bankruptcy, than we are with the Canadian terminology. Here in Canada there are two types of bankruptcy administrations used for both consumer and corporate bankruptcy filings.
The first, referred to as a Summary Administration is used for the majority of consumer bankruptcies. This is a streamlined bankruptcy process for individuals who have less than $15,000 of equity in exempt or non-exempt assets. In a Summary Administration, there is no notice in the newspaper and no automatic meeting of creditors. The creditors do have the right to call for a meeting however this is not a common occurrence.
The other type is referred to as Ordinary Administration. These are used for all corporate bankruptcies and for consumer bankruptcies where the debtor has equity in exempt assets greater than $15,000. The only other differences, from the bankrupt’s perspective, is that with an Ordinary Administration there is a mandatory meeting of creditors and there is a also a requirement for the Trustee to publish a notice of the bankruptcy in the newspaper.
In some cases, it may be possible to structure a Consumer Proposal to pay equity in assets where that amount exceeds $15,000 and thereby avoid the necessity of filing an Ordinary bankruptcy and publishing the debtor’s name in the newspaper.
Your licensed insolvency trustee will complete a thorough review of your financial situation and help you decide the best option.
Powell Associates Ltd. is a Licensed Insolvency Trustee (LIT) focused on providing debt settlement, proposal and bankruptcy solutions for individuals and businesses. We offer free consultations to review your personal financial situation and practical debt resolution options. Contact us to discuss your situation over the phone or book an appointment to meet us face-to-face in Saint John, Moncton, Fredericton, Charlottetown or Dartmouth - it's your choice.