An Act to establish the Wage Earner Protection Program Act, to amend the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act and to make consequential amendments to other Acts (S.C. 2005, c. 47)
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Assented to 2005-11-25
102. The portion of subsection 170(1) of the Act before paragraph (a) is replaced by the following:
Marginal note:Trustee to prepare report
170. (1) The trustee shall, in the prescribed circumstances and at the prescribed times, prepare a report, in the prescribed form, with respect to
103. (1) Subsections 170.1(1) to (5) of the Act are replaced by the following:
Marginal note:Mediation request to be sent to official receiver
170.1 (1) If the discharge of an individual bankrupt is opposed by a creditor or the trustee in whole or in part on a ground referred to in paragraph 173(1)(m) or (n), the trustee shall send an application for mediation, in the prescribed form, to the official receiver within five days after the day on which the bankrupt would have been automatically discharged had the opposition not been made, or within any further time after that day that the official receiver may allow.
(2) Subsections 170.1(6) to (9) of the Act are renumbered as subsections 170.1(2) to (5).
104. (1) Subsection 172(1) of the Act is replaced by the following:
Marginal note:Court may grant or refuse discharge
172. (1) On the hearing of an application of a bankrupt for a discharge, other than a bankrupt referred to in section 172.1, the court may
(a) grant or refuse an absolute order of discharge;
(b) suspend the operation of an absolute order of discharge for a specified time; or
(c) grant an order of discharge subject to any terms or conditions with respect to any earnings or income that may afterwards become due to the bankrupt or with respect to the bankrupt’s after-acquired property.
(2) The portion of subsection 172(2) of the Act before paragraph (a) is replaced by the following:
Marginal note:Powers of court to refuse or suspend discharge or grant conditional discharge
(2) The court shall, on proof of any of the facts referred to in section 173 given orally under oath or by affidavit,
(3) Section 172 of the Act is amended by adding the following after subsection (2):
Marginal note:Directions to pay
(2.1) If the court imposes as a condition of discharge that the bankrupt pay money, the court may direct that the bankrupt pay the money to any creditor, to any class of creditors, to the trustee or to the trustee and one or more creditors, in any amount and manner that the court considers appropriate.
105. The Act is amended by adding the following after section 172:
Marginal note:Exception — personal income tax debtors
172.1 (1) In the case of a bankrupt who has $200,000 or more of personal income tax debt and whose personal income tax debt represents 75% or more of the bankrupt’s total unsecured proven claims, the hearing of an application for a discharge may not be held before the expiry of
(a) if the bankrupt has never before been bankrupt under the laws of Canada or of any prescribed jurisdiction,
(i) 9 months after the date of bankruptcy if the bankrupt has not been required to make payments under section 68 to the estate of the bankrupt at any time during those 9 months, or
(ii) 21 months after the date of bankruptcy, in any other case;
(b) if the bankrupt has been a bankrupt one time before under the laws of Canada or of any prescribed jurisdiction,
(i) 24 months after the date of bankruptcy if the bankrupt has not been required to make payments under section 68 to the estate of the bankrupt at any time during those 24 months, or
(ii) 36 months after the date of bankruptcy, in any other case; and
(c) in the case of any other bankrupt, 36 months after the date of the bankruptcy.
Marginal note:Appointment to be obtained by trustee
(2) Before proceeding to the trustee’s discharge and before the first day that the hearing could be held in respect of a bankrupt referred to in subsection (1), the trustee must, on five days notice to the bankrupt, apply to the court for an appointment for a hearing of the application for the bankrupt’s discharge.
Marginal note:Powers of court to refuse or suspend discharge or grant conditional discharge
(3) On the hearing of an application for a discharge referred to in subsection (1), the court shall, subject to subsection (4),
(a) refuse the discharge;
(b) suspend the discharge for any period that the court thinks proper; or
(c) require the bankrupt, as a condition of his or her discharge, to perform any acts, pay any moneys, consent to any judgments or comply with any other terms that the court may direct.
Marginal note:Factors to be considered
(4) In making a decision in respect of the application, the court must take into account
(a) the circumstances of the bankrupt at the time the personal income tax debt was incurred;
(b) the efforts, if any, made by the bankrupt to pay the personal income tax debt;
(c) whether the bankrupt made payments in respect of other debts while failing to make reasonable efforts to pay the personal income tax debt; and
(d) the bankrupt’s financial prospects for the future.
Marginal note:Requirements if discharge suspended
(5) If the court makes an order suspending the discharge, the court shall, in the order, require the bankrupt to file income and expense statements with the trustee each month and to file all returns of income required by law to be filed.
Marginal note:Court may modify after year
(6) If, at any time after the expiry of one year after the day on which any order is made under this section, the bankrupt satisfies the court that there is no reasonable probability that he or she will be in a position to comply with the terms of the order, the court may modify the terms of the order or of any substituted order, in any manner and on any conditions that it thinks fit.
Marginal note:Power to suspend
(7) The powers of suspending and of attaching conditions to the discharge of a bankrupt may be exercised concurrently.
Meaning of “personal income tax debt”
(8) For the purpose of this section, “personal income tax debt” means the amount payable, within the meaning of subsection 223(1) of the Income Tax Act without reference to paragraphs (b) to (c), by an individual and the amount that is payable by an individual under any provincial legislation that imposes a tax similar in nature to the income tax imposed on individuals under the Income Tax Act, including, for greater certainty, the amount of any interest, penalties or fines imposed under the Income Tax Act or the provincial legislation.
106. Section 175 of the Act is repealed.
107. (1) Paragraph 178(1)(e) of the Act is replaced by the following:
(e) any debt or liability for obtaining property or services by false pretences or fraudulent misrepresentation;
(2) Subparagraph 178(1)(g)(ii) of the Act is replaced by the following:
(ii) within seven years after the date on which the bankrupt ceased to be a full- or part-time student; or
(3) Subsection 178(1.1) of the Act is replaced by the following:
Marginal note:Court may order non-application of subsection (1)
(1.1) At any time after five years after a bankrupt who has a debt referred to in paragraph (1)(g) ceases to be a full- or part-time student, 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.
108. Section 179 of the English version of the Act is replaced by the following:
Marginal note:Partner or co-trustee not released
179. An order of discharge does not release a person who at the time of the bankruptcy was a partner or co-trustee with the bankrupt or was jointly bound or had made a joint contract with the bankrupt, or a person who was surety or in the nature of a surety for the bankrupt.
109. Section 181 of the Act is amended by adding the following after subsection (2):
Marginal note:Final statement of receipts and disbursements
(3) If an order is made under subsection (1), the trustee shall, without delay, prepare the final statements of receipts and disbursements referred to in section 151.
110. (1) Subsection 197(5) of the Act is repealed.
(2) Subsections 197(6.1) to (8) of the Act are replaced by the following:
Marginal note:Costs of discharge opposed
(6.1) If a creditor opposes the discharge of a bankrupt, the court may, if it grants the discharge on the condition that the bankrupt pay an amount or consent to a judgment to pay an amount, award costs, including legal costs, to the opposing creditor out of the estate in an amount that is not more than the amount realized by the estate under the conditional order, including any amount brought into the estate under the consent to the judgment.
Marginal note:Costs where opposition frivolous or vexatious
(7) If a creditor opposes the discharge of a bankrupt and the court finds the opposition to be frivolous or vexatious, the court may order the creditor to pay costs, including legal costs, to the estate.
111. Paragraph 199(b) of the Act is replaced by the following:
(b) obtains credit to a total of $1,000 or more from any person or persons without informing them that the undischarged bankrupt is an undischarged bankrupt,
- Date modified: