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

Marginal note:Directives re surplus income

• 68 (1) The Superintendent shall, by directive, establish in respect of the provinces or one or more bankruptcy districts or parts of bankruptcy districts, the standards for determining the surplus income of an individual bankrupt and the amount that a bankrupt who has surplus income is required to pay to the estate of the bankrupt.

• Marginal note:Definitions

  (2) The following definitions apply in this section.

  surplus income

  surplus income means the portion of a bankrupt individual’s total income that exceeds that which is necessary to enable the bankrupt individual to maintain a reasonable standard of living, having regard to the applicable standards established under subsection (1). (revenu excédentaire)

  total income

  total income

  • (a) includes, despite paragraphs 67(1)(b) and (b.3), a bankrupt’s revenues of whatever nature or from whatever source that are earned or received by the bankrupt between the date of the bankruptcy and the date of the bankrupt’s discharge, including those received as damages for wrongful dismissal, received as a pay equity settlement or received under an Act of Parliament, or of the legislature of a province, that relates to workers’ compensation; but

  • (b) does not include any amounts received by the bankrupt between the date of the bankruptcy and the date of the bankrupt’s discharge, as a gift, a legacy or an inheritance or as any other windfall. (revenu total)

• Marginal note:Determination of trustee re surplus income

  (3) The trustee shall, having regard to the applicable standards and to the personal and family situation of the bankrupt, determine whether the bankrupt has surplus income. The determination must also be made

  • (a) whenever the trustee becomes aware of a material change in the bankrupt’s financial situation; and

  • (b) whenever the trustee is required to prepare a report referred to in subsection 170(1).

• Marginal note:Duties of trustee relating to determination

  (4) Whenever the trustee is required to determine whether the bankrupt has surplus income, the trustee shall

  • (a) if the trustee determines that there is surplus income,

    • (i) fix, having regard to the applicable standards, the amount that the bankrupt is required to pay to the estate of the bankrupt,

    • (ii) inform, in the prescribed manner, the official receiver, and every creditor who has requested such information, of the amount fixed under subparagraph (i), and

    • (iii) take reasonable measures to ensure that the bankrupt complies with the requirement to pay; and

  • (b) if the trustee determines that there is no surplus income, inform, in the prescribed manner, the official receiver, and every creditor who has requested such information, of that determination.

• Marginal note:Official receiver recommendation

  (5) If the official receiver determines that the amount required to be paid by the bankrupt is substantially not in accordance with the applicable standards, the official receiver shall recommend to the trustee and to the bankrupt an amount required to be paid that the official receiver determines is in accordance with the applicable standards.

• Marginal note:Trustee may fix another amount

  (5.1) On receipt of the official receiver’s recommendation, the trustee may fix, having regard to the applicable standards, another amount as the amount that the bankrupt is required to pay to the estate of the bankrupt, and if the trustee does so, the trustee shall

  • (a) inform the official receiver and every creditor, in the prescribed manner, of the amount fixed under this subsection; and

  • (b) take reasonable measures to ensure that the bankrupt complies with the requirement to pay.

• Marginal note:Trustee may request mediation

  (6) If the trustee and the bankrupt are not in agreement with the amount that the bankrupt is required to pay under subsection (4) or (5.1), the trustee shall, without delay, in the prescribed form, send to the official receiver a request that the matter be determined by mediation and send a copy of the request to the bankrupt.

• Marginal note:Creditor may request mediation

  (7) On a creditor’s request made within 30 days after the day on which the trustee informed the creditor of the amount fixed under subsection (4) or (5.1), the trustee shall, within five days after the day on which the 30-day period ends, send to the official receiver a request, in the prescribed form, that the matter of the amount that the bankrupt is required to pay be determined by mediation and send a copy of the request to the bankrupt and the creditor.

• Marginal note:Mediation procedure

  (8) A mediation shall be in accordance with prescribed procedures.

• Marginal note:File

  (9) Documents contained in a file on the mediation of a matter under this section form part of the records referred to in subsection 11.1(2).

• Marginal note:Application to court to fix amount

  (10) The trustee may, in any of the following circumstances — and shall apply if requested to do so by the official receiver in the circumstances referred to in paragraph (a) — apply to the court to fix, by order, in accordance with the applicable standards, and having regard to the personal and family situation of the bankrupt, the amount that the bankrupt is required to pay to the estate of the bankrupt:

  • (a) if the trustee has not implemented a recommendation made by the official receiver under subsection (5);

  • (b) if the matter submitted to mediation has not been resolved by the mediation; or

  • (c) if the bankrupt has failed to comply with the requirement to pay as determined under this section.

• Marginal note:Fixing fair and reasonable remuneration in the case of related persons

  (11) The court may fix an amount that is fair and reasonable

  • (a) as salary, wages or other remuneration for the services being performed by a bankrupt for a person employing the bankrupt, or

  • (b) as payment for or commission in respect of any services being performed by a bankrupt for a person,

  where the person is related to the bankrupt, and the court may, by order, determine the part of the salary, wages or other remuneration, or the part of the payment or commission, that shall be paid to the trustee on the basis of the amount so fixed by the court, unless it appears to the court that the services have been performed for the benefit of the bankrupt and are not of any substantial benefit to the person for whom they were performed.

• Marginal note:Modification of order

  (12) On the application of any interested person, the court may, at any time, amend an order made under this section to take into account material changes that have occurred in the financial situation of the bankrupt.

• Marginal note:Default by other person

  (13) An order of the court made under this section may be served on a person from whom the bankrupt is entitled to receive money and, in such case,

  • (a) the order binds the person to pay to the estate of the bankrupt the amount fixed by the order; and

  • (b) if the person fails to comply with the terms of the order, the court may, on the application of the trustee, order the person to pay the trustee the amount of money that the estate of the bankrupt would have received had the person complied with the terms of the order.

• Marginal note:Application is a proceeding

  (14) For the purposes of section 38, an application referred to in subsection (10) is deemed to be a proceeding for the benefit of the estate.

• Marginal note:Property included for enforcement purposes

  (15) For the purpose of this section, a requirement that a bankrupt pay an amount to the estate is enforceable against the bankrupt’s total income.

• Marginal note:When obligation to pay ceases

  (16) If an opposition to the automatic discharge of a bankrupt individual who is required to pay an amount to the estate is filed, the bankrupt’s obligation under this section ceases on the day on which the bankrupt would have been automatically discharged had the opposition not been filed, but nothing in this subsection precludes the court from determining that the bankrupt is required to pay to the estate an amount that the court considers appropriate.

Marginal note:Assignment of wages

• 68.1 (1) An assignment of existing or future wages made by a debtor before the debtor became bankrupt is of no effect in respect of wages earned after the bankruptcy.

• Marginal note:Assignment of book debts

  (2) An assignment of existing or future amounts receivable as payment for or commission or professional fees in respect of services rendered by a debtor who is an individual before the debtor became bankrupt is of no effect in respect of such amounts earned or generated after the bankruptcy.

Stay of Proceedings

Marginal note:Stay of proceedings — notice of intention

• 69 (1) Subject to subsections (2) and (3) and sections 69.4, 69.5 and 69.6, on the filing of a notice of intention under section 50.4 by an insolvent person,

  • (a) no creditor has any remedy against the insolvent person or the insolvent person’s property, or shall commence or continue any action, execution or other proceedings, for the recovery of a claim provable in bankruptcy,

  • (b) no provision of a security agreement between the insolvent person and a secured creditor that provides, in substance, that on

    • (i) the insolvent person’s insolvency,

    • (ii) the default by the insolvent person of an obligation under the security agreement, or

    • (iii) the filing by the insolvent person of a notice of intention under section 50.4,

    the insolvent person ceases to have such rights to use or deal with assets secured under the agreement as he would otherwise have, has any force or effect,

  • (c) Her Majesty in right of Canada may not exercise Her rights under

    • (i) subsection 224(1.2) of the Income Tax Act, or

    • (ii) any provision of the Canada Pension Plan or of the Employment Insurance Act that

      • (A) refers to subsection 224(1.2) of the Income Tax Act, and

      • (B) provides for the collection of a contribution, as defined in the Canada Pension Plan, an employee’s premium or employer’s premium, as defined in the Employment Insurance Act, or a premium under Part VII.1 of that Act, and of any related interest, penalties or other amounts,

    in respect of the insolvent person where the insolvent person is a tax debtor under that subsection or provision, and

  • (d) Her Majesty in right of a province may not exercise her rights under any provision of provincial legislation in respect of the insolvent person where the insolvent person is a debtor under the provincial legislation and the provision has a similar purpose to subsection 224(1.2) of the Income Tax Act, or refers to that subsection, to the extent that it provides for the collection of a sum, and of any related interest, penalties or other amounts, where the sum

    • (i) has been withheld or deducted by a person from a payment to another person and is in respect of a tax similar in nature to the income tax imposed on individuals under the Income Tax Act, or

    • (ii) is of the same nature as a contribution under the Canada Pension Plan if the province is a province providing a comprehensive pension plan as defined in subsection 3(1) of the Canada Pension Plan and the provincial legislation establishes a provincial pension plan as defined in that subsection,

  until the filing of a proposal under subsection 62(1) in respect of the insolvent person or the bankruptcy of the insolvent person.

• Marginal note:Limitation

  (2) The stays provided by subsection (1) do not apply

  • (a) to prevent a secured creditor who took possession of secured assets of the insolvent person for the purpose of realization before the notice of intention under section 50.4 was filed from dealing with those assets;

  • (b) to prevent a secured creditor who gave notice of intention under subsection 244(1) to enforce that creditor’s security against the insolvent person more than ten days before the notice of intention under section 50.4 was filed, from enforcing that security, unless the secured creditor consents to the stay;

  • (c) to prevent a secured creditor who gave notice of intention under subsection 244(1) to enforce that creditor’s security from enforcing the security if the insolvent person has, under subsection 244(2), consented to the enforcement action; or

  • (d) [Repealed, 2012, c. 31, s. 416]

• Marginal note:Limitation

  (3) A stay provided by paragraph (1)(c) or (d) does not apply, or terminates, in respect of Her Majesty in right of Canada and every province if

  • (a) the insolvent person defaults on payment of any amount that becomes due to Her Majesty after the filing of the notice of intention and could be subject to a demand under

    • (i) subsection 224(1.2) of the Income Tax Act,

    • (ii) any provision of the Canada Pension Plan or of the Employment Insurance Act that refers to subsection 224(1.2) of the Income Tax Act and provides for the collection of a contribution, as defined in the Canada Pension Plan, an employee’s premium, or employer’s premium, as defined in the Employment Insurance Act, or a premium under Part VII.1 of that Act, and of any related interest, penalties or other amounts, or

    • (iii) any provision of provincial legislation that has a similar purpose to subsection 224(1.2) of the Income Tax Act, or that refers to that subsection, to the extent that it provides for the collection of a sum, and of any related interest, penalties or other amounts, where the sum

      • (A) has been withheld or deducted by a person from a payment to another person and is in respect of a tax similar in nature to the income tax imposed on individuals under the Income Tax Act, or

      • (B) is of the same nature as a contribution under the Canada Pension Plan if the province is a province providing a comprehensive pension plan as defined in subsection 3(1) of the Canada Pension Plan and the provincial legislation establishes a provincial pension plan as defined in that subsection; or

  • (b) any other creditor is or becomes entitled to realize a security on any property that could be claimed by Her Majesty in exercising Her rights under

    • (i) subsection 224(1.2) of the Income Tax Act,

    • (ii) any provision of the Canada Pension Plan or of the Employment Insurance Act that refers to subsection 224(1.2) of the Income Tax Act and provides for the collection of a contribution, as defined in the Canada Pension Plan, an employee’s premium, or employer’s premium, as defined in the Employment Insurance Act, or a premium under Part VII.1 of that Act, and of any related interest, penalties or other amounts, or

    • (iii) any provision of provincial legislation that has a similar purpose to subsection 224(1.2) of the Income Tax Act, or that refers to that subsection, to the extent that it provides for the collection of a sum, and of any related interest, penalties or other amounts, where the sum

      • (A) has been withheld or deducted by a person from a payment to another person and is in respect of a tax similar in nature to the income tax imposed on individuals under the Income Tax Act, or

      • (B) is of the same nature as a contribution under the Canada Pension Plan if the province is a province providing a comprehensive pension plan as defined in subsection 3(1) of the Canada Pension Plan and the provincial legislation establishes a provincial pension plan as defined in that subsection.