Bankruptcy and Insolvency Act

Marginal note:Proof may be requested

• 128 (1) Where the trustee has knowledge of property that may be subject to a security, the trustee may, by serving notice in the prescribed form and manner, require any person to file, in the prescribed form and manner, a proof of the security that gives full particulars of the security, including the date on which the security was given and the value at which that person assesses it.

• Marginal note:Where reply not received

  (1.1) Where the trustee serves a notice pursuant to subsection (1), and the person on whom the notice is served does not file a proof of security within thirty days after the day of service of the notice, the trustee may thereupon, with leave of the court, sell or dispose of any property that was subject to the security, free of that security.

• Marginal note:Dividend on balance

  (2) A creditor is entitled to receive a dividend in respect only of the balance due to him after deducting the assessed value of his security.

• Marginal note:Trustee may redeem security

  (3) The trustee may redeem a security on payment to the secured creditor of the debt or the value of the security as assessed, in the proof of security, by the secured creditor.