Top 5 Bankruptcy Lawyer in Toronto
Bankruptcy Lawyer Toronto
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DAVID SKLAR & ASSOCIATES INC.
245 Fairview Mall Dr #720, North York, ON M2J 4T1
Filing for personal bankruptcy is a legal procedure that enables a individual facing overwhelming financial difficulties to clear their debts and make a fresh start.
Bankruptcy isn’t meant for men and women who intentionally or recklessly set out to conquer their lenders. Instead, it’s meant for those that have unexpectedly become unable to settle their debts. For instance, they may have genuinely made some poor borrowing or spending options, or else they could have suddenly lost their occupation or struck marital or health issues.
To qualify for insolvency :
You have to spend at least $1,000,
you should not be able to pay your debts as they become due, also
you ought to be unable to repay your debts even though most of your assets were to be sold. In law, this means that you’re insolvent.
Benefits of bankruptcy
There are a number of important advantages to filing for insolvency and being formally declared bankrupt. These comprise:
You’re no more accountable for your existing debts and can stop making payments right to your unsecured creditors,
you will no more need your wages garnished,
you’re protected from legal actions and any suits against you from your creditors will soon be stopped,
you will not obtain any harassing telephone calls from your lenders,
you can earn a clean financial start, along with
it’s a fairly fast and inexpensive procedure in contrast to other options.
Disadvantages of insolvency
There are, however, disadvantages to bankruptcy, the major one being your bankruptcy stays on your credit report for six or seven years (depending on the coverage of your credit reporting service ). Also, you might be asked to surrender some possessions to your trustee, you are required to keep detailed records of your income and expenses while you stay bankrupt, and naturally, it usually means that your creditors will not be able to collect the money that you owe your own. Because of this, you will have difficulty obtaining a credit card or a loan once you have filed for bankruptcy. This may not be a poor thing. If bankruptcy is a result of misbudgeting or poor credit options, this can force you to learn how to live in your financial plan.
The Parliament of Canada has exclusive jurisdiction to regulate matters relating to bankruptcy and insolvency, by virtue of s.91 of the Constitution Act, 1867. It has passed the following statutes as a result:
The Bankruptcy and Insolvency Act (“BIA”)
The Companies’ Creditors Arrangements Act (“CCAA”)
The Farm Debt Mediation Act
The Wage Earner Protection Program Act
The Winding-Up and Restructuring Act (which essentially applies only to financial institutions under federal jurisdiction)
In applying these statutes, provincial law has important consequences. Section 67(1)(b) of the BIA provides that “any property that as against the bankrupt is exempt from execution or seizure under any laws applicable in the province within which the property is situated and within which the bankrupt resides”.
Provincial legislation under the property and civil rights power of the Constitution Act, 1867 regulates the resolution of financial difficulties that occur before the onset of insolvency. Notable legislation is in effect for governing:
creation of security interests (with notable caveats)
bulk sales (in Ontario only)
relief of creditor
seizure of assets
assignments and preferences
Administration of insolvency law
The Office of the Superintendent of Bankruptcy is charged with the administration of the BIA and the CCAA. All records relating to matters under those Acts are accessible at their website. The Office also licenses trustees in bankruptcy (LTIR), who are authorized to:
administer estates of bankrupts
handle consumer and commercial proposals in order to forestall an assignment in bankruptcy
act as a monitor under the CCAA
act as a receiver under Part XI of the BIA, to take possession and administer property as a consequence of provisions in a security agreement or by virtue of any federal or provincial law that authorizes the appointment of a receiver or receiver-manager
Bankruptcy and Insolvency Act
The Bankruptcy and Insolvency Act (“BIA”) (French: Loi sur la faillite et l’insolvabilité) (the Act) is one of the statutes that regulates the law on bankruptcy and insolvency in Canada. It governs bankruptcies, consumer and commercial proposals, and receiverships in Canada.
It also governs the Office of the Superintendent of Bankruptcy, a federal agency responsible for ensuring that bankruptcies are administered in a fair and orderly manner.
Purpose and scope
The nature of the Act within Canada’s legal framework governing insolvency was described by the Supreme Court of Canada in Century Services Inc. v. Canada (Attorney General):
“  Canadian commercial insolvency law is not codified in one exhaustive statute. Instead, Parliament has enacted multiple insolvency statutes, the main one being the BIA. The BIA offers a self-contained legal regime providing for both reorganization and liquidation…. It is characterized by a rules-based approach to proceedings. The BIA is available to insolvent debtors owing $1000 or more, regardless of whether they are natural or legal persons. It contains mechanisms for debtors to make proposals to their creditors for the adjustment of debts. If a proposal fails, the BIA contains a bridge to bankruptcy whereby the debtor’s assets are liquidated and the proceeds paid to creditors in accordance with the statutory scheme of distribution. ”
With certain exceptions, the Act covers a wide range of entities:
it covers anyone who has resided or carried on business in Canada
it “includes a partnership, an unincorporated association, a corporation, a cooperative society or a cooperative organization, the successors of a partnership, of an association, of a corporation, of a society or of an organization and the heirs, executors, liquidators of the succession, administrators or other legal representatives of a person;” but
partners in a partnership may be placed into bankruptcy with that partnership, but that can only occur where the partnership is located in one of the common-law jurisdictions; the Civil Code of Quebec defines partnership property as being a patrimony independent from its partners
it does not apply to banks, insurance companies, trust companies, loan companies, and railways. (insolvent financial institutions are governed by the Winding-Up and Restructuring Act  and insolvent railways by the Canada Transportation Act)
The Farm Debt Mediation Act provides that farmers cannot be forced into bankruptcy, but they can make a voluntary assignment.
The Companies’ Creditors Arrangement Act provides that a court may order a stay of proceedings with respect to specified large debtors, whether or not they have already been initiated.
The Act governs bankruptcy proceedings, which are invoked:
either voluntarily by a person who is insolvent,
by a debtor’s creditors, where the debtor owes at least $1000 and has committed an act of bankruptcy, or
where a proposal under the Act has failed.
The Act also governs receivership proceedings. Receivers may be appointed by a secured creditor under the terms of a general security agreement (where the debtor voluntarily agrees), or by the court where a secured creditor:
is enforcing his security, or
is acting under a court order made under any other federal or provincial statute that authorizes the appointment of a receiver or receiver-manager.
Provision is also made for dealing with cross-border insolvencies and the recognition of foreign proceedings.
Relationship with provincial law
Several notable cases known as the “bankruptcy quartet” stand for the following propositions about how the Act interacts with provincial legislation:
provinces cannot create priorities between creditors or change the scheme of distribution on bankruptcy under s. 136(1) of the Act;
while provincial legislation may validly affect priorities in a non-bankruptcy situation, once bankruptcy has occurred section 136(1) of the Act determines the status and priority of the claims specifically dealt with in that section;
if the provinces could create their own priorities or affect priorities under the Bankruptcy Act this would invite a different scheme of distribution on bankruptcy from province to province, an unacceptable situation; and
the definition of terms such as “secured creditor”, if defined under the Bankruptcy Act, must be interpreted in bankruptcy cases as defined by the federal Parliament, not the provincial legislatures. Provinces cannot affect how such terms are defined for purposes of the Act.
in determining the relationship between provincial legislation and the Bankruptcy Act, the form of the provincial interest created must not be allowed to triumph over its substance. The provinces are not entitled to do indirectly what they are prohibited from doing directly.
there need not be any provincial intention to intrude into the exclusive federal sphere of bankruptcy and to conflict with the order of priorities of the Bankruptcy Act in order to render the provincial law inapplicable. It is sufficient that the effect of provincial legislation is to do so.
However, there are instances where provincial law will continue to apply:
where the insolvent person is one that plainly falls within provincial jurisdiction (such as a municipal institution), a province has authority to compel reorganizations of bodies and debt obligations
where a stay under federal law has been lifted in order to allow proceedings to take place, a province can still impose a moratorium on proceedings that fall under provincial law
Issues concerning the extent of federal paramountcy continue to come before the Supreme Court of Canada. In the 2015 “paramountcy trilogy,” the boundaries were further explored:
An Alberta Act was held neither to disqualify a person from driving a motor vehicle or to suspend the registration of such vehicles, because of an unsatisfied personal injury debt that had been discharged in bankruptcy.
An Ontario Act governing the collection of tolls charged by 407 ETR was held not to apply to bar a discharged bankrupt from renewing his license plates upon payment of normal annual fees.
However, a Saskatchewan Act that required creditors to serve a notice of intention, engage in mandatory mediation, and prove that the debtor has no reasonable possibility of meeting its obligations or is not making a sincere and reasonable effort to meet its obligations before it can begin an action with respect to farm land was held not to be inconsistent with the BIA, as cooperative federalism dictates that provincial legislative power should not be constrained, absent an actual inconsistency.