What Are the Different Types of Bankruptcy Administrations?

For those of us who watch American television programs, we are likely more familiar with the 3 types of bankruptcy which are most common in the US, Chapter 7, Chapter 11 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. We will explore the different types of bankruptcy filings in this article.

The first, referred to as a Summary Administration is used for the majority of consumer bankruptcies (personal 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 also a requirement for the Trustee to publish a notice of the bankruptcy in the newspaper. Otherwise, both types of bankruptcy filings are treated nearly identically.

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. We are experienced, hands-on insolvency practitioners who understand the personal impacts of major financial stress;

  • You won’t be stuck in an assembly line process.

  • You will expect and receive prompt responses and resolution of issues from our supportive and experienced team.

  • We will review your debt solution options, including filing a consumer proposal or personal bankruptcy.

  • We help Canadians with overwhelming debt get fresh financial starts.

Once you file a consumer proposal or personal bankruptcy, we deal directly with your creditors on your behalf. Your unsecured creditors are required to stop contacting you or continuing legal proceedings against you. Contact us for a free consultation.

We offer free consultations to review your financial situation and practical debt resolution options. Contact us to discuss your situation over the phone, a video chat, or in-person in Saint John, Moncton, Fredericton, Charlottetown, Dartmouth, or Miramichi.