Bankruptcy and Insolvency Act

Marginal note:Stay of proceedings — bankruptcy

• 69.3 (1) Subject to subsections (2) and (3) and sections 69.4 and 69.5, on the bankruptcy of any debtor, no creditor has any remedy against the debtor or the debtor’s property, or may commence or continue any action, execution or other proceedings, for the recovery of a claim provable in bankruptcy, until the trustee has been discharged.

• Marginal note:Secured creditors

  (2) Subject to sections 79 and 127 to 135 and subsection 248(1), the bankruptcy of a debtor does not prevent a secured creditor from realizing or otherwise dealing with his security in the same manner as he would have been entitled to realize or deal with it if this section had not been passed, unless the court otherwise orders, but in so ordering the court shall not postpone the right of the secured creditor to realize or otherwise deal with his security, except as follows:

  • (a) in the case of a security for a debt that is due at the date the bankrupt became bankrupt or that becomes due not later than six months thereafter, that right shall not be postponed for more than six months from that date; and

  • (b) in the case of a security for a debt that does not become due until more than six months after the date the bankrupt became bankrupt, that right shall not be postponed for more than six months from that date, unless all instalments of interest that are more than six months in arrears are paid and all other defaults of more than six months standing are cured, and then only so long as no instalment of interest remains in arrears or defaults remain uncured for more than six months, but, in any event, not beyond the date at which the debt secured by the security becomes payable under the instrument or law creating the security.

• Marginal note:Exception

  (2.1) No order may be made under subsection (2) if the order would have the effect of preventing a secured creditor from realizing or otherwise dealing with financial collateral.

• Marginal note:Secureed creditors — aircraft objects

  (3) The bankruptcy of a debtor does not prevent a creditor who holds security on aircraft objects — or who is a lessor of aircraft objects or a conditional seller of aircraft objects — under an agreement with the bankrupt from taking possession of the equipment

  • (a) if, after the commencement of proceedings under this Act, the trustee defaults in protecting or maintaining the equipment in accordance with the agreement;

  • (b) sixty days after the commencement of proceedings under this Act unless, during that period, the trustee

    • (i) remedied the default of every other obligation under the agreement, other than a default constituted by the commencement of proceedings under this Act or the breach of a provision in the agreement relating to the bankrupt’s financial condition,

    • (ii) agreed to perform the obligations under the agreement, other than an obligation not to become insolvent or an obligation relating to the bankrupt’s financial condition, until the day on which proceedings under this Act end, and

    • (iii) agreed to perform all the obligations arising under the agreement after the proceedings under this Act end; or

  • (c) if, during the period that begins on the expiry of the sixty-day period and ends on the day on which proceedings under this Act end, the trustee defaults in performing an obligation under the agreement, other than an obligation not to become insolvent or an obligation relating to the bankrupt’s financial condition.