LAW 603 Lecture Notes - Lecture 6: Unsecured Creditor, Unsecured Debt, Bankruptcy Act
9 Jul 2017
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#610-612 bia (bankruptcy and insolvency act) provides a framework to administer the bankruptcy process. Does not apply to banks, insurance or trust companies, railways or farmers/fishers (last two b/c of highly volatile nature of the farming / fishing industries) #612 insolvency is the inability of the debtor to meet their financial obligations to their creditors. #613 bankruptcy is the legal status of a person who has either made an assignment in bankruptcy (voluntarily) or had a bankruptcy order made against them by a court based on a creditor"s application (involuntarily). However, first-time consumer debtors who demonstrate responsible behavior are usually discharged within 9 months. Trustee"s claim to be paid for work is a preferred claim. Trustee represent creditors-> liquidity assets, before paying off unsecured debt, take up to 7. 5% of unsecured debt upfront. Creditors have the right to appoint a maximum of five inspectors to supervise the trustee in managing the bankrupt"s property.
