Bankruptcy and Insolvency Act (R.S.C., 1985, c. B-3)

Marginal note:Consolidation order not to be issued

• 226 (1) A consolidation order that does not provide for the payment in full of all the debts to which it refers within a period of three years shall not be issued unless

  • (a) all registered creditors consent thereto in writing; or

  • (b) the order is approved by the court.

• Marginal note:Deemed consent

  (1.1) Where a registered creditor does not give any response to a request for consent under paragraph (1)(a) within thirty days after receiving such a request, the creditor shall be deemed to have consented to the order.

• Marginal note:Referral to court

  (2) Any consolidation order referred to in subsection (1) shall be referred to the court for approval or otherwise by the clerk on notice of motion to any registered creditor who has not consented thereto in writing.

Marginal note:Review of consolidation order

• 227 (1) The court may, on application to review a consolidation order of the clerk made by notice of motion within fifteen days after the making of the order by any of the parties affected thereby, review the consolidation order and confirm or vary it or set it aside and make such disposition of the matter as the court sees fit.

• Marginal note:Decision to be entered

  (2) The clerk shall enter any decision made by the court under subsection (1) in the register and the decision takes effect in place of the order of the clerk.

Marginal note:Terms may be imposed on debtor

228 The court may, in deciding any matter brought before it, impose such terms on a debtor with respect to the custody of his property or any disposition thereof or of the proceeds thereof as it deems proper to protect the registered creditors and may give such directions for that purpose as the circumstances require.

Marginal note:Process stayed by consolidation order

229 On the making of a consolidation order, no process shall be issued out of any court in the province in which the debtor resides against the debtor at the instance of a creditor in respect of any debt to which this Part applies, except as permitted by this Part.

Marginal note:Assignments of debtor’s property to clerk

• 230 (1) The clerk may, at any time after the making of a consolidation order, require of and take from the debtor an assignment to himself as clerk of the court of any moneys due, owing or payable or to become due, owing or payable to the debtor, or earned or to be earned by the debtor.

• Marginal note:Notification

  (2) Unless otherwise agreed on, the clerk shall forthwith notify the person owing or about to owe the moneys of the assignment referred to in subsection (1) and all moneys collected thereon shall be applied to the credit of the claims against the debtor under the consolidation order.

• Marginal note:Writ of execution

  (3) The clerk may issue a writ of execution or certificate of judgment in respect of a consolidation order and cause it to be filed in any place where the writ or certificate may bind or be a charge on land or chattels.

Marginal note:Adding creditors after order

• 231 (1) Where, at any time before the payment in full of the claims against a debtor under a consolidation order, the clerk is notified of a claim to which this Part applies that is not entered in the order, he shall, subject to subsection (2) and on notice to the debtor and creditor and to each registered creditor,

  • (a) settle the amount owing to the creditor;

  • (b) where he deems it necessary to do so, vary the amounts to be paid by the debtor into court and the times of payment thereof in order to provide for the new claim; and

  • (c) enter the matters referred to in paragraphs (a) and (b) in the register.

• Marginal note:Court to decide

  (2) Where the debtor or any registered creditor disputes the claim of a creditor described in subsection (1), the clerk shall on notice of motion refer the matter to the court and the decision of the court shall be entered in the register.

• Marginal note:Notice

  (3) The clerk shall make such amendments to the consolidation order as may be necessary to give effect to any entries in the register made pursuant to this section, and shall give notice thereof to the registered creditors.

• Marginal note:Creditor to share

  (4) On the entry of a claim in the register pursuant to this section, the creditor shall share with the other creditors in any further distribution of moneys paid into court by or on behalf of the debtor.

Marginal note:Secured claims

• 232 (1) A registered creditor holding security for a claim may, at any time, elect to rely on his security notwithstanding that the claim is included in a consolidation order.

• Marginal note:Proceeds in excess

  (2) Where the proceeds from the disposal of the security referred to in subsection (1) are in excess of the registered creditor’s claim, the excess shall be paid into court and applied in payment of other judgments against the debtor.

• Marginal note:Exemption

  (3) Subsection (2) does not apply where the security is in the form of chattels exempt from seizure under any law in force in the province in which the consolidation order was issued.

• Marginal note:Reduced claim

  (4) Where the proceeds from the disposal of the security referred to in subsection (1) are less than the registered creditor’s claim, the creditor remains entitled to the balance of his claim.

• Marginal note:Exception

  (5) Subsection (4) does not apply in a case where, under the law in force in the province in which the consolidation order was issued, a creditor

  • (a) who enforces his security by repossession or repossession and sale, or

  • (b) who seizes and sells the security under an execution issued pursuant to a judgment obtained against the debtor in respect of the claim so secured,

  is limited in his recovery of the claim to the security so repossessed or the proceeds of the sale thereof.

Marginal note:Enforcement of order in default of debtor

• 233 (1) A registered creditor may apply by notice of motion to the court where

  • (a) a debtor defaults in complying with any order or direction of the court;

  • (b) any other proceeding for the recovery of money is brought against the debtor;

  • (c) the debtor has, after the consolidation order was made, incurred further debts totalling in excess of five hundred dollars;

  • (d) a judgment is recovered against the debtor larger in amount than a judgment to which this Part applies without the judgment creditor’s consent, and the judgment creditor refuses to permit his name to be added to the register; or

  • (e) the debtor has property or funds that should be made available for the satisfaction of the consolidation order.

• Marginal note:Ex parte application

  (2) A registered creditor may apply ex parte to the court where a debtor

  • (a) is about to abscond or has absconded from the province in which the consolidation order was issued leaving personal property liable to seizure under execution; or

  • (b) with intent to defraud his creditors has attempted or is attempting to remove from the province in which the consolidation order was issued personal property liable to seizure under execution.

• Marginal note:Proceedings authorized

  (3) On the application referred to in subsection (1) or (2), the court may

  • (a) authorize the registered creditor making the application to take on behalf of all the registered creditors such proceedings to enforce the consolidation order as the court deems advisable; or

  • (b) where it deems it advisable and on notice to all parties, make an order permitting all the registered creditors to proceed each independently of the others for the enforcement of their claims under the consolidation order.

• Marginal note:Moneys applied to judgment

  (4) All moneys recovered as a result of proceedings taken pursuant to paragraph (3)(a) after payment of costs incurred thereby shall be paid into the court and shall be applied to the credit of the judgments against the debtor appearing in the register.

• Marginal note:Proceedings where continuing default

  (5) Where a debtor defaults in making any payment into court required to be made under a consolidation order and the default continues for a period of three months, all the registered creditors are entitled to proceed forthwith, each independently of the others and without reference to the court, for the enforcement of their claims under the consolidation order, unless the court otherwise directs on being satisfied, on application by the debtor, that the circumstances giving rise to the default and to its continuation were beyond the control of the debtor.

• Marginal note:Debtor not entitled to relief

  (6) Where any order has been made under paragraph (3)(b) or any proceedings have been commenced under subsection (5), the debtor under the consolidation order is not, without the leave of the court, entitled to any further relief under this Part during the currency of any claim against him entered in the register.

Marginal note:Re-examination of debtor

• 234 (1) A debtor or any registered creditor may at any time apply ex parte to the clerk for a further examination and hearing of the debtor in respect of his financial circumstances.

• Marginal note:Idem

  (2) The further hearing referred to in subsection (1) may only be held

  • (a) with the leave of the clerk; or

  • (b) in the event of the refusal of the clerk, with leave of the court.

• Marginal note:Notice of hearing

  (3) The clerk shall give all parties to the consolidation order at least thirty days notice of the time appointed for the hearing referred to in subsection (1).

• Marginal note:Clerk may vary order, etc.

  (4) Where after considering the evidence presented at the further hearing referred to in subsection (1) the clerk is of the opinion that

  • (a) the terms of payment set out in the consolidation order, or

  • (b) the decision that the circumstances of the debtor do not warrant the immediate settling of any amounts or times of payment thereof,

  should be changed because of a change in the circumstances of the debtor, he may

  • (c) vary the order with respect to the amounts to be paid by the debtor into court or the times of payment thereof, or

  • (d) on notice of motion refer the matter to the court for settlement.

• Marginal note:Application of section 227

  (5) Section 227 applies, with such modifications as the circumstances require, to a decision of the clerk under subsection (4).

Marginal note:Disposition of moneys paid into court

• 235 (1) Subject to subsection (3), the clerk shall distribute the moneys paid into court on account of the debts of a debtor at least once every three months.

• Marginal note:Idem

  (2) The clerk shall distribute the money paid under subsection (1) rateably, or as nearly so as is practicable, among the registered creditors.

• Marginal note:Payments less than five dollars

  (3) Except in the case of a final payment under a consolidation order, the clerk is not required to make a payment to any creditor if the amount thereof is less than five dollars.