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

Act current to 2020-01-27 and last amended on 2019-11-01. Previous Versions

PART XOrderly Payment of Debts (continued)

Marginal note:Adding additional creditors

 At the time appointed for the hearing of any objection in connection with a consolidation order, the clerk may add to the register the name of any creditor of the debtor of whom he has notice and who is not disclosed in the affidavit of the debtor.

  • R.S., c. B-3, s. 193

Marginal note:Hearing of objections

  •  (1) The clerk shall, at the time appointed for the hearing thereof, consider any objection in connection with a consolidation order that has been filed with him in accordance with this Part, and

    • (a) if the objection is to the claim of a creditor and the parties are brought to agreement or if the creditor’s claim is a judgment of a court and the only objection is to the amount paid thereon, he may dispose of the objection in a summary manner and determine the amount owing to the creditor;

    • (b) if the objection is to the proposed terms or method of payment of the claims by the debtor or that terms of payment are not but should be fixed, he may dispose of the objection in a summary manner and determine, as the circumstances require, the terms and method of payment of the claims, or that no terms be presently fixed; and

    • (c) in any case he may on notice of motion refer any objection to be disposed of by the court or as the court otherwise directs.

  • Marginal note:Issue of order

    (2) After the conclusion of the hearing referred to in subsection (1), the clerk shall enter in the register his decision or the decision of the court, as the case may be, and issue a consolidation order.

  • R.S., c. B-3, s. 194

Marginal note:Issue of consolidation order

 Where no objection has been received within thirty days after the date of the sending of the notice of an application for a consolidation order pursuant to section 220, the clerk shall

  • (a) make an entry in the register to that effect; and

  • (b) issue the consolidation order.

  • R.S., 1985, c. B-3, s. 224
  • 1992, c. 1, s. 18, c. 27, s. 83

Marginal note:Contents of consolidation order

  •  (1) A consolidation order shall state the following:

    • (a) the name of and the amount owing to each creditor named in the register; and

    • (b) the amounts to be paid into court by the debtor and the times of payment thereof or, where applicable, that the present circumstances of the debtor do not warrant the immediate settling of any such amounts or times.

  • Marginal note:Effect of order

    (2) A consolidation order

    • (a) is a judgment of the court in favour of each creditor named in the register for the amount stated therein to be owing to that creditor;

    • (b) is an order of the court for the payment by the debtor of the amounts stated therein and at the stated times; and

    • (c) bears interest at the rate which by law applies to a judgment debt arising from a judgment of the court that granted the order or at such other rate as may be prescribed by regulation.

  • R.S., 1985, c. B-3, s. 225
  • 1992, c. 27, s. 84

Marginal note:Consolidation order not to be issued

  •  (1) A consolidation order that does not provide for the payment in full of all the debts to which it refers within a period of three years shall not be issued unless

    • (a) all registered creditors consent thereto in writing; or

    • (b) the order is approved by the court.

  • Marginal note:Deemed consent

    (1.1) Where a registered creditor does not give any response to a request for consent under paragraph (1)(a) within thirty days after receiving such a request, the creditor shall be deemed to have consented to the order.

  • Marginal note:Referral to court

    (2) Any consolidation order referred to in subsection (1) shall be referred to the court for approval or otherwise by the clerk on notice of motion to any registered creditor who has not consented thereto in writing.

  • R.S., 1985, c. B-3, s. 226
  • 1992, c. 27, s. 85

Marginal note:Review of consolidation order

  •  (1) The court may, on application to review a consolidation order of the clerk made by notice of motion within fifteen days after the making of the order by any of the parties affected thereby, review the consolidation order and confirm or vary it or set it aside and make such disposition of the matter as the court sees fit.

  • Marginal note:Decision to be entered

    (2) The clerk shall enter any decision made by the court under subsection (1) in the register and the decision takes effect in place of the order of the clerk.

  • R.S., 1985, c. B-3, s. 227
  • 1997, c. 12, s. 115

Marginal note:Terms may be imposed on debtor

 The court may, in deciding any matter brought before it, impose such terms on a debtor with respect to the custody of his property or any disposition thereof or of the proceeds thereof as it deems proper to protect the registered creditors and may give such directions for that purpose as the circumstances require.

  • R.S., c. B-3, s. 199

Marginal note:Process stayed by consolidation order

 On the making of a consolidation order, no process shall be issued out of any court in the province in which the debtor resides against the debtor at the instance of a creditor in respect of any debt to which this Part applies, except as permitted by this Part.

  • R.S., c. B-3, s. 200

Marginal note:Assignments of debtor’s property to clerk

  •  (1) The clerk may, at any time after the making of a consolidation order, require of and take from the debtor an assignment to himself as clerk of the court of any moneys due, owing or payable or to become due, owing or payable to the debtor, or earned or to be earned by the debtor.

  • Marginal note:Notification

    (2) Unless otherwise agreed on, the clerk shall forthwith notify the person owing or about to owe the moneys of the assignment referred to in subsection (1) and all moneys collected thereon shall be applied to the credit of the claims against the debtor under the consolidation order.

  • Marginal note:Writ of execution

    (3) The clerk may issue a writ of execution or certificate of judgment in respect of a consolidation order and cause it to be filed in any place where the writ or certificate may bind or be a charge on land or chattels.

  • R.S., c. B-3, s. 201

Marginal note:Adding creditors after order

  •  (1) Where, at any time before the payment in full of the claims against a debtor under a consolidation order, the clerk is notified of a claim to which this Part applies that is not entered in the order, he shall, subject to subsection (2) and on notice to the debtor and creditor and to each registered creditor,

    • (a) settle the amount owing to the creditor;

    • (b) where he deems it necessary to do so, vary the amounts to be paid by the debtor into court and the times of payment thereof in order to provide for the new claim; and

    • (c) enter the matters referred to in paragraphs (a) and (b) in the register.

  • Marginal note:Court to decide

    (2) Where the debtor or any registered creditor disputes the claim of a creditor described in subsection (1), the clerk shall on notice of motion refer the matter to the court and the decision of the court shall be entered in the register.

  • Marginal note:Notice

    (3) The clerk shall make such amendments to the consolidation order as may be necessary to give effect to any entries in the register made pursuant to this section, and shall give notice thereof to the registered creditors.

  • Marginal note:Creditor to share

    (4) On the entry of a claim in the register pursuant to this section, the creditor shall share with the other creditors in any further distribution of moneys paid into court by or on behalf of the debtor.

  • R.S., c. B-3, s. 202

Marginal note:Secured claims

  •  (1) A registered creditor holding security for a claim may, at any time, elect to rely on his security notwithstanding that the claim is included in a consolidation order.

  • Marginal note:Proceeds in excess

    (2) Where the proceeds from the disposal of the security referred to in subsection (1) are in excess of the registered creditor’s claim, the excess shall be paid into court and applied in payment of other judgments against the debtor.

  • Marginal note:Exemption

    (3) Subsection (2) does not apply where the security is in the form of chattels exempt from seizure under any law in force in the province in which the consolidation order was issued.

  • Marginal note:Reduced claim

    (4) Where the proceeds from the disposal of the security referred to in subsection (1) are less than the registered creditor’s claim, the creditor remains entitled to the balance of his claim.

  • Marginal note:Exception

    (5) Subsection (4) does not apply in a case where, under the law in force in the province in which the consolidation order was issued, a creditor

    • (a) who enforces his security by repossession or repossession and sale, or

    • (b) who seizes and sells the security under an execution issued pursuant to a judgment obtained against the debtor in respect of the claim so secured,

    is limited in his recovery of the claim to the security so repossessed or the proceeds of the sale thereof.

  • R.S., c. B-3, s. 203
 
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