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  • CCAA proceedings now at your fingertips

    Trustees, creditors, academics, policy makers and government officials have a new source of insolvency information available to them thanks to recent changes to the Companies’ Creditors Arrangement Act (CCAA). One result of the changes, which came into effect September 18, 2009, is that the Office of the Superintendent of Bankruptcy (OSB) became responsible for maintaining both a Registry of Public Records and a Repository of CCAA Files.

    Registry of Public Records
    Once a court grants protection to a debtor company under the CCAA, the monitor (trustee) must send basic information to the OSB within one business day. This information includes the court’s file number and coordinates—including the website address of both the debtor and the monitor.

     
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  • BANKRUPTCY FRAUD WARNING SIGNS - A CHECKLIST

    Use the following list to identify signs of bankruptcy fraud.

    • Failure to keep commonly used business records; incomplete or missing business records
    • Unusual depletion of assets shortly before bankruptcy filing
    • Assets are concealed
    • ...
     
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  • Creditors, Suppliers and Security Breaches

    Once upon a time, all the suppliers had to worry about what was the credit of their customers and the legal effectiveness of the security liens that they took on inventories. Now, debtors and creditors alike, for that matter, live under the constant threat of security breaches which can have consequences of a material order of magnitude. As a lawyer advising payments companies, I thought it would be interesting to discuss security breaches ...

     
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  • Court Declines to Approve Sale of Assets as Part of Proposal Proceedings

    In the decision of Justice Cumming In the Matter of the Proposal of Hypnotic Clubs Inc. (“Hypnotic” or the “Debtor”) the court dismissed a motion by the Debtor for a sale of its assets pursuant to s.65.13 of the Bankruptcy and Insolvency Act (“BIA”).

     
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  • The Interprovincial Enforcement of Judgments

    A Creditor and a Debtor enter into a financial agreement in Alberta. After several years, the Debtor moves to Manitoba, leaving behind only sparse assets, (not nearly enough to cover the costs owed) in Alberta. Following a slowdown of repayments, the Creditor decides to take legal action against the Debtor in the Alberta Court of the Queen’s Bench.

     
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  • Factoring Agreement: Security or Sale of Assets?

    Lenders and other members of the factoring community should be aware of the potential impact of a recent ruling on a priority fight over the accounts receivable of a bankrupt company.  One of the issues that the court had to consider was the application of a factoring agreement.

     
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  • Demand Promissory Notes and the (New) Ontario Limitations Act

    Hare v. Hare (218 O.A.C. 164), a December 2006 decision of the Ontario Court of Appeal, has important ramifications for the use of demand promissory notes in tax planning. Legal and tax planners should be aware that standard drafting language used in promissory notes may bring about unintended consequences.

     
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  • Debt Collection Rules

    If you deal with consumers, you should be mindful of the debt collection laws in force in the jurisdictions where your customers are located.  Adapted from the...

     
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  • PPSA & Legislative Q's
     
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  • Role of the Office of the Superintendent of Bankruptcy (OSB)

    The Office of the Superintendent of Bankruptcy (OSB) is part of Industry Canada. Their role is to ensure public confidence in the market place by protecting the integrity of the bankruptcy and insolvency system.

     
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  • BIA compared to the CCAA

    The Companies' Creditors Arrangement Act (CCAA) is a federal law allowing insolvent corporations that owe their creditors in excess of $5 million to restructure their business and financial affairs. Under the CCAA, corporations ask the Court for protection while they prepare ...

     
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  • Free Fraud Detection Resources

    One of the simplest ways to detect potential fraud is to confirm certain information provided on a credit application using easy, free resources on the Internet. As a commercial collection agency, we regularly get claims where this has not been done and we discover that the information provided was either misleading or outright fraud. In either case, it is...

     
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  • Collection Agencies
    Businesses may engage collection agencies to assist them in the collection of debts from both consumers and businesses. In Canada, agencies must be licensed in a province to operate there. The provincial governments have developed regulations that govern the activities of these agencies.
     
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  • The Ultimate Skip List

    Valerie McGilvrey is a US Professional Skip Tracer who has agreed to share this list with the members of the Credit Institute of Canada. Much of the information is US related, but can be adapted for Canada.

     
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  • PIPEDA and Collections

    Often, collection activity requires interacting with personal information about a consumer, in order to research, contact or collect from that consumer. Whether you are in an internal receivables department, third party collection agency, or you are a legal agent...

     
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  • What is a Proposal?

    Under the Bankruptcy and Insolvency Act, a Trustee or an Administrator of Proposals files a Proposal or an arrangement between you and your creditors to have you pay off only a portion of your debts, extend the time you have to pay off the debt, or provide some combination of both.

     
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  • PPSA Registrations - Is this the Weakness in Your Armour?

    As the saying goes, an ounce of prevention is worth a pound of cure. This expression is particularly apt when it comes to secured creditors and their registrations under the Ontario Personal Property Security Act (the "PPSA"). Although "getting it right the first time" has always been the mantra of secured creditors, the economic roller coaster ride of recent months has heightened the need to ensure a properly perfected secured claim.

     
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  • Risk Assessment

    Risk assessment is a step in a risk management procedure. Risk assessment is the determination of quantitative or qualitative value of risk related to a concrete situation and a recognized threat (also called hazard). Quantitative risk assessment requires calculations of two components of risk (R):, the magnitude of the potential loss (L), and the probability (p) that the loss will occur.

     
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  • PPSA

    The Personal Property Security Act ("PPSA") is the name given to each of the statutes passed by all common law provinces, as well as the territories, of Canada. They regulate the creation and registration of...

     
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  • Insights for the Target Debtor Community
    Our webinar on the Target Bankruptcy would be of great interest to companies who felt the financial pinch from Targets shutdown in Canada. Webinar participants found it very insightful.
     
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  • Sue Me
    There are a few reasons a debtor might say they’ll see you in court, and none are in your favour. More importantly, you don’t need to go to the stress, lost time and expense of suing an individual or business over a debt.
     
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Q and A (2)
  • How many collection calls should one make before referring a file to a collection agency?
    https://creditedu.org/knowledgecentre/index.php/site/qa/1

    The best way to determine this is by establishing a process whereby a collector goes through a series of steps in which h/she establishes the ability and willingness of a debtor to pay the overdue bills.  It’s quite possible to make a decision to escalate a file to a collection agency right after the very first call.  On the other hand, if there are reasons to believe that a cooperative debtor is experiencing temporary cash flow difficulties, then it may take repeated calls to work out a solution over time.

  • What can creditors do to protect themselves when a customer remits a cheque, for less than the full amount owing, and marks it "Paid in Full" or words to that effect? Also, what can a creditor do to protect themselves in this situation when their company uses a "lock box" or "shared service" center and the A/R personnel may not even see the cheque prior to it being negotiated? Is the law that governs these scenarios Federal or Provincial?
    https://creditedu.org/knowledgecentre/index.php/site/qa/3

    Courts are very familiar with this tactic and will generally not give effect to it. A cheque marked “paid in full” may very well be evidence of an agreement to reduce the debt owing, but it is easily rebuttable by clear evidence that the creditor accepted the payment only as partial payment. This is based at least partially on the concept of consideration. Put simply, this concept involves the idea that you do not get something for nothing. What the debtor is attempting to do in this situation is to receive a discount on its debt without providing any real benefit to the creditor in return. The courts will not allow a debtor to unilaterally alter its agreement with its creditor - which is what it is attempting to do with the notation on the cheque.

    One possible method of dealing with such attempts would be regularly forwarding statements thanking the debtors for any payments received and indicating the account balance to date. If the debtor then challenges the statement arguing that payment had been made in full by way of the cheque in question, all the creditor would have to do would be to respond by saying it was received in partial payment. Unless the debtor is able to produce some sort of an agreement with the creditor showing the creditor’s agreement to accept the reduced amount in full satisfaction for the amount owing, it is extremely unlikely that the courts find in favour of the debtor.

    Of course, if the creditor notices the notation before it deposits the cheque, it can also send a specific letter to the debtor thanking it for the payment and saying that the payment has been applied against the amount owing, that the creditor did not agree to accept the payment in full satisfaction of the amount owing and that the balance remains owing by the debtor.

    The law governing these scenarios is the common law of contract, which is a matter within the jurisdiction of the provinces. As such, the law as interpreted in one province may not necessarily be applied in another. However, frequently the courts in one province will consider and often follow the decisions of courts in other provinces.

Wiki (13)
  • Secured Creditor
    https://creditedu.org/knowledgecentre/index.php/site/wiki/65
    A person holding an instrument such as a mortgage or hypothecary claim, a lien or preference on or against the whole or part of the property of a debtor as security for a debt due to him from the debtor.
  • Stay of Proceedings
    https://creditedu.org/knowledgecentre/index.php/site/wiki/70
    Upon the filing of a bankruptcy, a proposal or a notice of intention to make a proposal, no creditor with a claim provable in bankruptcy shall have any remedy against the debtor or the debtor's property or shall commence or continue any action, execution or other proceedings for the recovery of a claim provable in bankruptcy.
  • Receiver
    https://creditedu.org/knowledgecentre/index.php/site/wiki/62
    A person who has taken possession pursuant to a security agreement of substantially all of the inventory, accounts receivables or the other property of the debtor. Receiver also includes a person who has been appointed privately pursuant to a security agreement or by an order of the court for the protection or collection of property that is the subject of diverse claims, usually to seize and sell the property of the debtor.
  • Debtor
    https://creditedu.org/knowledgecentre/index.php/site/wiki/17
    One who owes an obligation to another, usually to pay money.
  • Provable Claim
    https://creditedu.org/knowledgecentre/index.php/site/wiki/59
    Any liability of the debtor for a debt incurred before the date of the bankruptcy.
  • Lien
    https://creditedu.org/knowledgecentre/index.php/site/wiki/40
    A legal right or interest that a creditor has in the debtor's property, lasting usually until the debt that it secures is satisfied.
  • Assets
    https://creditedu.org/knowledgecentre/index.php/site/wiki/4
    Items that are owned and have value; in the context of bankruptcy it means all the property of the debtor available for the general benefit of creditors.
  • Preference
    https://creditedu.org/knowledgecentre/index.php/site/wiki/54
    The payment of money or the granting of security by a debtor that benefits one or more creditors to the detriment of the other creditors.
  • Advance notice
    https://creditedu.org/knowledgecentre/index.php/site/wiki/2
    A legal document under the Act whereby a secured creditor provides 10 days notice to an insolvent debtor of its intention to enforce its security.
  • Garnishment
    https://creditedu.org/knowledgecentre/index.php/site/wiki/29
    A legal process whereby a creditor requires a third party to turn over a debtor's property, such as wages or bank accounts, to a creditor.
  • Statement of Affairs
    https://creditedu.org/knowledgecentre/index.php/site/wiki/69
    The bankrupt's financial statement or a balance sheet of assets and liabilities showing the estimated value of the debtor's property and the names and addresses of creditors and the amounts owed.
  • Discharge
    https://creditedu.org/knowledgecentre/index.php/site/wiki/20
    The release of a debtor from most debts. A bankrupt's discharge may be automatic, suspended, conditional or absolute. The court may also refuse the bankrupt's discharge.
  • Division II Proposal (Consumer Proposal)
    https://creditedu.org/knowledgecentre/index.php/site/wiki/23
    A simplified proposal for repayment of debt to creditors, available under the Act to a consumer debtor whose aggregate debts, excluding a home mortgage, do not exceed the amount prescribed in the Act.