AFM231 Study Guide - Credit Counseling, Chapter 27, Official Receiver

• School: University of Waterloo
• Department: Accounting & Financial Management
• Course: AFM231
• Professor: Sally Gunz

Document Summary

Informal steps: find a way, maybe using a third party, to come to a negotiated settlement: all creditors must agree. If debtor cannot find a trustee, they are forced to proceed to some form of debt counselling services b: a trustee begins by assessing the estate- all the assets of the bankrupt individual. They prepare a pseudo-balance sheet: a firm is declared insolvent (unable to meet financial obligations as they become due or having insufficient assets to meet obligations) if, owes more than , and b. Is unable to meet financial obligations, or: has ceased paying obligations as they become due, or, has insufficient assets to meet obligations. If the business wishes to operate, the owner of the business must make a proposal to creditors. A proposal is a contractual agreement between the debtor and the creditors that allows an insolvent debt to reorganize and continue in business.