Bankruptcy and Insolvency Act

Marginal note:Bankruptcy petition

• 43 (1) Subject to this section, one or more creditors may file in court a petition for a receiving order against a debtor if, and if it is alleged in the petition that,

  • (a) the debt or debts owing to the petitioning creditor or creditors amount to one thousand dollars; and

  • (b) the debtor has committed an act of bankruptcy within six months next preceding the filing of the petition.

• Marginal note:Where petitioning creditor is a secured creditor

  (2) Where the petitioning creditor referred to in subsection (1) is a secured creditor, he shall in his petition either state that he is willing to give up his security for the benefit of the creditors in the event of a receiving order being made against the debtor, or give an estimate of the value of his security, and in the latter case he may be admitted as a petitioning creditor to the extent of the balance of the debt due to him after deducting the value so estimated, in the same manner as if he were an unsecured creditor.

• Marginal note:Affidavit

  (3) The petition shall be verified by affidavit of the petitioner or by someone duly authorized on his behalf having personal knowledge of the facts alleged in the petition.

• Marginal note:Consolidation of petitions

  (4) Where two or more petitions are filed against the same debtor or against joint debtors, the court may consolidate the proceedings or any of them on such terms as the court thinks fit.

• Marginal note:Place of filing

  (5) The petition shall be filed in the court having jurisdiction in the judicial district of the locality of the debtor.

• Marginal note:Proof of facts, etc.

  (6) At the hearing of the petition, the court shall require proof of the facts alleged in the petition and of the service of the petition, and, if satisfied with the proof, may make a receiving order.

• Marginal note:Dismissal of petition

  (7) Where the court is not satisfied with the proof of the facts alleged in the petition or of the service of the petition, or is satisfied by the debtor that he is able to pay his debts, or that for other sufficient cause no order ought to be made, it shall dismiss the petition.

• Marginal note:Dismissal with respect to some respondents only

  (8) Where there are more respondents than one to a petition, the court may dismiss the petition with respect to one or more of them, without prejudice to the effect of the petition as against the other or others of them.

• Marginal note:Appointment of trustee

  (9) On a receiving order being made, the court shall appoint a licensed trustee as trustee of the property of the bankrupt, having regard, as far as the court deems just, to the wishes of the creditors.

• Marginal note:Stay of proceedings where facts denied

  (10) Where the debtor appears at the hearing of the petition and denies the truth of the facts alleged in the petition, the court may, instead of dismissing the petition, stay all proceedings on the petition on such terms as it may see fit to impose on the petitioner as to costs or on the debtor to prevent alienation of his property and for such time as may be required for trial of the issue relating to the disputed facts.

• Marginal note:Stay of proceedings for other reasons

  (11) The court may for other sufficient reason make an order staying the proceedings under a petition, either altogether or for a limited time, on such terms and subject to such conditions as the court may think just.

• Marginal note:Security for costs

  (12) A petitioner who is resident out of Canada may be ordered to give security for costs to the debtor, and proceedings under the petition may be stayed until the security is furnished.

• Marginal note:Receiving order on another petition

  (13) Where proceedings on a petition have been stayed or have not been prosecuted with due diligence and effect, the court may, if by reason of the delay or for any other cause it is deemed just, substitute or add as petitioner any other creditor to whom the debtor may be indebted in the amount required by this Act and make a receiving order on the petition of the other creditor, and shall thereupon dismiss on such terms as it may deem just the petition in the stayed or non-prosecuted proceedings.

• Marginal note:Withdrawing petition

  (14) A petition shall not be withdrawn without the leave of the court.

• Marginal note:Petition against one partner

  (15) Any creditor whose claim against a partnership is sufficient to entitle him to present a bankruptcy petition may present a petition against any one or more partners of the firm without including the others.

• Marginal note:Court may consolidate proceedings

  (16) Where a receiving order has been made against one member of a partnership, any other petition against a member of the same partnership shall be filed in or transferred to the same court, and the court may give such directions for consolidating the proceedings under the petitions as it thinks just.

• Marginal note:Continuance of proceedings on death of debtor

  (17) Where a debtor against whom a petition has been filed dies, the proceedings shall, unless the court otherwise orders, be continued as if he were alive.