cash, bank accounts
• insurance policies for life and property, and names of beneficiaries and relationship
• furniture and furnishings
• securities including stocks, guaranteed investment certificates (GIC), shares of public and private companies
• bonds, over the last five years including brokerage statements
• vehicles, licence plates, ownership, and insurance particulars
• real estate
• leasehold
• equipment
• receivables and IOUs
• personal assets including collections having a value of more than $500, collections of silver, crystal, gold, coins, liquor, guns, art, and artifacts
• credit cards
• copies of net worth statements provided to any bank, lender, or other creditor
• copies of pass books or bank statements in the consumer debtor’s name alone or jointly with others
• copies of all credit card statements in the consumer debtor’s name
• Full particulars of all debts including names of creditors in alphabetical order, addresses, and amounts outstanding.
• RRSP, RRIF, and other pension statements for the last five years including documentation with respect to any change in the names of beneficiaries. The trustee and creditors cannot attach RRSPs except for monies invested within one year of bankruptcy.
• Full particulars of all dispositions and transfers of property within 12 months of taking protection and within 5 years of taking protection.
• Delivery of all credit cards, ownership registrations, mortgages, title deeds, guarantees, insurance policies, tax returns, and all other documents evidencing ownership and debt.
Chapter 2
Who Are the People Involved in a Bankruptcy?
As discussed in Chapter 1, a debtor can be an individual person, partnership, or a corporation that is unable to pay debts in the ordinary course. In this chapter, we discuss the other people who are involved in the bankruptcy community including the trustee in bankruptcy, the Superintendent of Bankruptcy or the Office of the Superintendent of Bankruptcy (OSB), the Official Receiver, the Bankruptcy Registrar, and the judge. In all bankruptcies, the consumer debtor comes in contact only with the trustee in bankruptcy. Depending on the nature and size of the bankruptcy, the consumer debtor may come into contact with the other persons referred to in this chapter. The consumer debtor will, of course, have some knowledge about each of the creditors through his or her dealings. Most consumer debtors have many credit cards in their possession and on their Statement of Affairs, they list them with their account numbers, addresses, and debts.
See Figure 1 for a visual of the people involved in a bankruptcy.
Figure 1: Structure
1. The Trustee in Bankruptcy (the Administrator)
The trustee in bankruptcy is an individual person or corporation that is licensed by the Superintendent of Bankruptcy under the Department of Industry of the federal government of Canada, referred to as Industry Canada. The trustee’s role is to administer the bankrupt’s estate, essentially liquidating a debtor’s assets and then making a distribution of the sale proceeds to the creditors. It is the trustee in bankruptcy who assists the debtor through this cleansing process.
The trustee has many duties that are described in the Bankruptcy and the Insolvency Act. The trustee is usually a person who is a chartered accountant or certified management accountant in private practice, or who is associated with an accounting firm that has a corporate licence to act as a licensed trustee in bankruptcy. The trustee does not, however, have to be a chartered accountant or a certified management accountant. Most of the larger accounting houses in Canada have a bankruptcy department and there are numerous smaller firms and individuals who practise in the bankruptcy field. Most insolvency practitioners are members of the Canadian Association of Insolvency and Restructuring Profession and are given a Chartered Insolvency Restructuring Professional (CIRP) designation to follow their name if they have successfully completed their course of study. As of December 31, 2012, there were approximately 1,000 licensed trustees in Canada.
The trustee is an officer of the court who acts as an intermediary between the debtor and the creditors. While the trustee is appointed to protect the debtor from harassment, the trustee must also assure the creditors that all the debtor’s assets have been accounted for and that they have been properly disposed of. The trustee must be even-handed and impartial to both the debtor and the creditors.
The trustee is the person who administers each of the bankruptcy estates. Some of the trustee’s responsibilities are to —
• review with the debtor how the bankruptcy process operates;
• interview the debtor with respect to recovering all the debtor’s assets including past and present and attaching future assets;
• advise the debtor of his or her duties under the Bankruptcy and Insolvency Act
• call and chair a meeting of creditors when required;
• sell or dispose the assets and then distribute the proceeds according the priorities under the Act;
• report to the creditors generally as to the financial affairs of the bankrupt and on the bankrupt’s discharge; and
• counsel the debtor as to the causes of financial problems and how to avoid them in the future. There are three counselling sessions, two of which are mandatory.
In situations where the insolvent person is a consumer, the Superintendent of Bankruptcy has the authority under the Bankruptcy and Insolvency Act> to appoint any person or a trustee to be an administrator under the Act for bankruptcies and consumer proposals. The administrator need not be a licensed trustee or an accountant. This is useful in remote communities which may not have access to a licensed trustee in bankruptcy. The administrator has all the powers and duties of a trustee in bankruptcy.
2. Different Types of Creditors
Under the Bankruptcy and Insolvency Act, there are three general types of creditors.
First, there are secured creditors. Secured creditors are types of creditors that hold some form of property as security for the payment of a debt. For example, if a bank holds a mortgage over the debtor’s home, the mortgage document creates the security against the home. The consumer debtor cannot sell or transfer the home without paying the bank. If the debtor fails to pay monthly, or fails to pay taxes or other amounts under the mortgage, the bank has the right to
