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

Act current to 2016-06-06 and last amended on 2015-02-26. Previous Versions

Marginal note:Facts for which discharge may be refused, suspended or granted conditionally
  •  (1) The facts referred to in section 172 are:

    • (a) the assets of the bankrupt are not of a value equal to fifty cents on the dollar on the amount of the bankrupt’s unsecured liabilities, unless the bankrupt satisfies the court that the fact that the assets are not of a value equal to fifty cents on the dollar on the amount of the bankrupt’s unsecured liabilities has arisen from circumstances for which the bankrupt cannot justly be held responsible;

    • (b) the bankrupt has omitted to keep such books of account as are usual and proper in the business carried on by the bankrupt and as sufficiently disclose the business transactions and financial position of the bankrupt within the period beginning on the day that is three years before the date of the initial bankruptcy event and ending on the date of the bankruptcy, both dates included;

    • (c) the bankrupt has continued to trade after becoming aware of being insolvent;

    • (d) the bankrupt has failed to account satisfactorily for any loss of assets or for any deficiency of assets to meet the bankrupt’s liabilities;

    • (e) the bankrupt has brought on, or contributed to, the bankruptcy by rash and hazardous speculations, by unjustifiable extravagance in living, by gambling or by culpable neglect of the bankrupt’s business affairs;

    • (f) the bankrupt has put any of the bankrupt’s creditors to unnecessary expense by a frivolous or vexatious defence to any action properly brought against the bankrupt;

    • (g) the bankrupt has, within the period beginning on the day that is three months before the date of the initial bankruptcy event and ending on the date of the bankruptcy, both dates included, incurred unjustifiable expense by bringing a frivolous or vexatious action;

    • (h) the bankrupt has, within the period beginning on the day that is three months before the date of the initial bankruptcy event and ending on the date of the bankruptcy, both dates included, when unable to pay debts as they became due, given an undue preference to any of the bankrupt’s creditors;

    • (i) the bankrupt has, within the period beginning on the day that is three months before the date of the initial bankruptcy event and ending on the date of the bankruptcy, both dates included, incurred liabilities in order to make the bankrupt’s assets equal to fifty cents on the dollar on the amount of the bankrupt’s unsecured liabilities;

    • (j) the bankrupt has on any previous occasion been bankrupt or made a proposal to creditors;

    • (k) the bankrupt has been guilty of any fraud or fraudulent breach of trust;

    • (l) the bankrupt has committed any offence under this Act or any other statute in connection with the bankrupt’s property, the bankruptcy or the proceedings thereunder;

    • (m) the bankrupt has failed to comply with a requirement to pay imposed under section 68;

    • (n) the bankrupt, if the bankrupt could have made a viable proposal, chose bankruptcy rather than a proposal to creditors as the means to resolve the indebtedness; and

    • (o) the bankrupt has failed to perform the duties imposed on the bankrupt under this Act or to comply with any order of the court.

  • Marginal note:Application to farmers

    (2) Paragraphs (1)(b) and (c) do not apply in the case of an application for discharge by a bankrupt whose principal occupation and means of livelihood on the date of the initial bankruptcy event was farming or the tillage of the soil.

  • R.S., 1985, c. B-3, s. 173;
  • 1997, c. 12, s. 103.
Marginal note:Assets of bankrupt when deemed equal to fifty cents in dollar

 For the purposes of section 173, the assets of a bankrupt shall be deemed of a value equal to fifty cents on the dollar on the amount of his unsecured liabilities when the court is satisfied that the property of the bankrupt has realized, is likely to realize or, with due care in realization, might have realized an amount equal to fifty cents on the dollar on his unsecured liabilities.

  • R.S., c. B-3, s. 144.
Marginal note:Court may grant certificates
  •  (1) A statutory disqualification on account of bankruptcy ceases when the bankrupt obtains from the court his discharge with a certificate to the effect that the bankruptcy was caused by misfortune without any misconduct on his part.

  • Marginal note:Appeal

    (2) The court may, if it thinks fit, grant a certificate mentioned in subsection (1), and a refusal to grant such a certificate is subject to appeal.

  • R.S., c. B-3, s. 145.
Marginal note:Duty of bankrupt on conditional discharge
  •  (1) Where an order is granted on terms or conditions or on the bankrupt consenting to judgment, the bankrupt shall, until the terms, conditions or judgment is satisfied,

    • (a) give the trustee such information as he may require with respect to his earnings and after-acquired property and income, and

    • (b) not less than once a year, file in the court and with the trustee a statement verified under oath showing the particulars of any property or income he may have acquired subsequent to the order for his discharge,

    and the trustee or any creditor may require the bankrupt to attend for examination under oath with respect to the facts contained in the statement or with respect to his earnings, income, after-acquired property or dealings.

  • Marginal note:Penalty for failure to comply

    (2) Where the bankrupt fails to give information or to file a statement as required by subsection (1), to attend for examination when required to do so or to answer all questions fully and accurately with respect to his earnings, income, after-acquired property or dealings, the court may on the application of the trustee or of any creditor revoke the order of discharge.

  • Marginal note:Trustee to distribute funds payable under conditional discharge

    (3) Where a conditional order of discharge of a bankrupt is made providing for payment of a further dividend or sum of money by the bankrupt, all payments on account thereof shall be made to the trustee for distribution to the creditors.

  • R.S., c. B-3, s. 146.

 [Repealed, 2000, c. 12, s. 17]

Marginal note:Debts not released by order of discharge
  •  (1) An order of discharge does not release the bankrupt from

    • (a) any fine, penalty, restitution order or other order similar in nature to a fine, penalty or restitution order, imposed by a court in respect of an offence, or any debt arising out of a recognizance or bail;

    • (a.1) any award of damages by a court in civil proceedings in respect of

      • (i) bodily harm intentionally inflicted, or sexual assault, or

      • (ii) wrongful death resulting therefrom;

    • (b) any debt or liability for alimony or alimentary pension;

    • (c) any debt or liability arising under a judicial decision establishing affiliation or respecting support or maintenance, or under an agreement for maintenance and support of a spouse, former spouse, former common-law partner or child living apart from the bankrupt;

    • (d) any debt or liability arising out of fraud, embezzlement, misappropriation or defalcation while acting in a fiduciary capacity or, in the Province of Quebec, as a trustee or administrator of the property of others;

    • (e) any debt or liability resulting from obtaining property or services by false pretences or fraudulent misrepresentation, other than a debt or liability that arises from an equity claim;

    • (f) liability for the dividend that a creditor would have been entitled to receive on any provable claim not disclosed to the trustee, unless the creditor had notice or knowledge of the bankruptcy and failed to take reasonable action to prove his claim;

    • (g) any debt or obligation in respect of a loan made under the Canada Student Loans Act, the Canada Student Financial Assistance Act or any enactment of a province that provides for loans or guarantees of loans to students where the date of bankruptcy of the bankrupt occurred

      • (i) before the date on which the bankrupt ceased to be a full- or part-time student, as the case may be, under the applicable Act or enactment, or

      • (ii) within seven years after the date on which the bankrupt ceased to be a full- or part-time student;

    • (g.1) any debt or obligation in respect of a loan made under the Apprentice Loans Act where the date of bankruptcy of the bankrupt occurred

      • (i) before the date on which the bankrupt ceased, under that Act, to be an eligible apprentice within the meaning of that Act, or

      • (ii) within seven years after the date on which the bankrupt ceased to be an eligible apprentice; or

    • (h) any debt for interest owed in relation to an amount referred to in any of paragraphs (a) to (g.1).

  • Marginal note:Court may order non-application of subsection (1)

    (1.1) At any time after five years after the day on which a bankrupt who has a debt referred to in paragraph (1)(g) or (g.1) ceases to be a full- or part-time student or an eligible apprentice, as the case may be, under the applicable Act or enactment, the court may, on application, order that subsection (1) does not apply to the debt if the court is satisfied that

    • (a) the bankrupt has acted in good faith in connection with the bankrupt’s liabilities under the debt; and

    • (b) the bankrupt has and will continue to experience financial difficulty to such an extent that the bankrupt will be unable to pay the debt.

  • Marginal note:Claims released

    (2) Subject to subsection (1), an order of discharge releases the bankrupt from all claims provable in bankruptcy.

  • R.S., 1985, c. B-3, s. 178;
  • R.S., 1985, c. 3 (2nd Supp.), s. 28;
  • 1992, c. 27, s. 64;
  • 1997, c. 12, s. 105;
  • 1998, c. 21, s. 103;
  • 2000, c. 12, s. 18;
  • 2001, c. 4, s. 32;
  • 2004, c. 25, s. 83;
  • 2005, c. 47, s. 107;
  • 2007, c. 36, s. 54;
  • 2014, c. 20, s. 484.
 
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