An Act to establish the Wage Earner Protection Program Act, to amend the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act and to make consequential amendments to other Acts (S.C. 2005, c. 47)
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Assented to 2005-11-25
AMENDMENTS TO THE BANKRUPTCY AND INSOLVENCY ACT
45. Section 66 of the Act is amended by adding the following after subsection (1):
Marginal note:Assignments
(1.1) For the purposes of subsection (1), in deciding whether to make an assignment under subsection 84.1(1), the court must, in addition to the factors referred to in subsection 84.1(4), also consider whether the insolvent person would not be able to make a viable proposal without the assignment.
Marginal note:Final statement of receipts and disbursements
(1.2) For the purposes of subsection (1), the trustee is to prepare the final statement of receipts and disbursements referred to in section 151 without delay after
(a) the debtor files or is deemed to have filed an assignment;
(b) the trustee informs the creditors and the official receiver of a default made in the performance of any provision in a proposal; or
(c) the trustee gives the certificate referred to in section 65.3 in respect of the proposal.
Marginal note:Examination by official receiver
(1.3) For the purposes of subsection (1), the examination under oath by the official receiver under subsection 161(1) is to be held, on the attendance of the person who has filed a notice of intention under section 50.4 or a proposal, before the proposal is approved by the court or the person becomes bankrupt.
46. The definition “consumer debtor” in section 66.11 of the Act is replaced by the following:
“consumer debtor”
« débiteur consommateur »
“consumer debtor” means an individual who is bankrupt or insolvent and whose aggregate debts, excluding any debts secured by the individual’s principal residence, are not more than $250,000 or any other prescribed amount;
47. Subsection 66.12(2) of the English version of the Act is replaced by the following:
Marginal note:Restriction
(2) A consumer debtor who has filed a notice of intention or a proposal under Division I may not make a consumer proposal until the trustee appointed in respect of the notice of intention or proposal under Division I has been discharged.
48. Paragraph 66.13(2)(d) of the Act is replaced by the following:
(d) subject to subsection (3), file with the official receiver a copy of the consumer proposal, signed by the consumer debtor, and the prescribed statement of affairs.
49. (1) Paragraph 66.14(a) of the Act is amended by adding the word “and” at the end of subparagraph (ii) and by repealing subparagraph (iii).
(2) Subparagraph 66.14(b)(i) of the Act is replaced by the following:
(i) a copy of the consumer proposal and a copy of the statement of affairs referred to in paragraph 66.13(2)(d),
50. Subsection 66.17(2) of the Act is replaced by the following:
Marginal note:Effect of assent or dissent
(2) Unless it is rescinded, any assent or dissent received by the administrator at or before a meeting of creditors has effect as if the creditor had been present and had voted at the meeting.
51. Subsection 66.28(2) of the Act is replaced by the following:
Marginal note:On whom approval binding
(2) Subject to subsection (2.1), a consumer proposal accepted, or deemed accepted, by the creditors and approved, or deemed approved, by the court is binding on creditors in respect of
(a) all unsecured claims; and
(b) secured claims for which proofs of claim have been filed in the manner provided for in sections 124 to 134.
Marginal note:When consumer debtor is released from debt
(2.1) A consumer proposal accepted, or deemed accepted, by the creditors and approved, or deemed approved, by the court does not release the consumer debtor from any particular debt or liability referred to in subsection 178(1) unless the consumer proposal explicitly provides for the compromise of that debt or liability and the creditor in relation to that debt or liability has assented to the consumer proposal.
52. Section 66.31 of the Act is replaced by the following:
Marginal note:Deemed annulment — default of payment
66.31 (1) Unless the court has previously ordered otherwise or unless an amendment to the consumer proposal has previously been filed, a consumer proposal is deemed to be annulled on
(a) in the case when payments under the consumer proposal are to be made monthly or more frequently, the day on which the consumer debtor is in default for an amount that is equal to or more than the amount of three payments; or
(b) in the case when payments under the consumer proposal are to be made less frequently than monthly, the day that is three months after the day on which the consumer debtor is in default in respect of any payment.
Marginal note:Deemed annulment — amendment withdrawn or refused
(2) If an amendment to a consumer proposal filed before the deemed annulment of the consumer proposal under subsection (1) is withdrawn or refused by the creditors or the court, the consumer proposal is deemed to be annulled on the day on which the amendment is withdrawn or refused.
Marginal note:Duties of administrator in relation to deemed annulment
(3) Without delay after a consumer proposal is deemed to be annulled, the administrator shall
(a) file with the official receiver, in the prescribed form, a report in relation to the deemed annulment; and
(b) send a notice to the creditors informing them of the deemed annulment.
Marginal note:Effects of deemed annulment — consumer proposal made by a bankrupt
(4) When a consumer proposal made by a bankrupt is deemed to be annulled,
(a) the consumer debtor is deemed to have made an assignment on the date of the deemed annulment;
(b) the trustee who is the administrator of the consumer proposal shall, within five days after the deemed annulment, send notice of the meeting of creditors under section 102, at which meeting the creditors may by ordinary resolution, despite section 14, affirm the appointment of the trustee or appoint another trustee in lieu of that trustee; and
(c) the trustee shall, without delay, file with the official receiver, in the prescribed form, a report of the deemed annulment and the official receiver shall, without delay, issue a certificate of assignment, in the prescribed form, which has the same effect for the purposes of this Act as an assignment filed under section 49.
Marginal note:Validity of things done before deemed annulment
(5) A deemed annulment of a consumer proposal does not prejudice the validity of any sale, disposition of property or payment duly made, or anything duly done under or in pursuance of the consumer proposal, and despite the deemed annulment, a guarantee given under the consumer proposal remains in full force and effect in accordance with its terms.
Marginal note:Notice of possibility of consumer proposal being automatically revived
(6) If the administrator, in the case of a deemed annulment of a consumer proposal made by a person other than a bankrupt, considers it appropriate to do so in the circumstances, he or she may, with notice to the official receiver, send to the creditors, within 10 days after the day on which the consumer proposal was deemed to be annulled, a notice in the prescribed form informing them that the consumer proposal will be automatically revived 45 days after the day on which it was deemed to be annulled unless one of them files with the administrator a notice of objection, in the prescribed manner, to the revival.
Marginal note:Automatic revival
(7) If the notice is sent by the administrator and no notice of objection is filed during the 45-day period, the consumer proposal is automatically revived on the expiry of those 45 days.
Marginal note:Notice if no automatic revival
(8) If a notice of objection is filed with the administrator during the 45-day period, the administrator must, without delay, send to the official receiver and to each creditor a notice in the prescribed form informing them that the consumer proposal is not going to be automatically revived on the expiry of the 45-day period.
Marginal note:Administrator may apply to court to revive consumer proposal
(9) The administrator may at any time apply to the court, with notice to the official receiver and the creditors, for an order reviving any consumer proposal of a consumer debtor who is not a bankrupt that has been deemed to be annulled, and the court, if it considers it appropriate to do so in the circumstances, may make an order reviving the consumer proposal, on any terms that the court considers appropriate.
Marginal note:Duty of administrator if consumer proposal is revived
(10) Without delay after a consumer proposal is revived, the administrator shall
(a) file with the official receiver, in the prescribed form, a report in relation to the revival; and
(b) send a notice to the creditors informing them of the revival.
Marginal note:Validity of things done before revival
(11) The revival of a consumer proposal does not prejudice the validity of anything duly done — between the day on which the consumer proposal is deemed to be annulled and the day on which it is revived — by a creditor in the exercise of any rights revived by subsection 66.32(2).
53. Subsection 66.32(2) of the French version of the Act is replaced by the following:
Marginal note:Rétablissement des droits
(2) En cas d’annulation — effective ou présumée — de la proposition, les droits des créanciers sont rétablis jusqu’à concurrence du montant de leurs réclamations, déduction faite toutefois des dividendes reçus.
54. Section 66.33 of the Act is repealed.
55. The portion of subsection 66.34(1) of the Act before paragraph (a) is replaced by the following:
Marginal note:Certain rights limited
66.34 (1) If a consumer proposal has been filed in respect of a consumer debtor, no person may terminate or amend any agreement, including a security agreement, with the consumer debtor, or claim an accelerated payment, or the forfeiture of the term, under any agreement, including a security agreement, with the consumer debtor, by reason only that
56. Sections 66.37 and 66.38 of the Act are replaced by the following:
Marginal note:Amendment to consumer proposal
66.37 If an administrator files an amendment to a consumer proposal before the withdrawal, refusal, approval or deemed approval by the court of the consumer proposal, or after the approval or deemed approval by the court of the consumer proposal and before it has been fully performed or annulled or deemed annulled, the provisions of this Division apply to the consumer proposal and the amended consumer proposal, with any modifications that the circumstances require, and, for that purpose, the definition “consumer debtor” in section 66.11 is to be read as follows:
- “consumer debtor”
“consumer debtor” means an individual who is insolvent;
Marginal note:Certificate if consumer proposal performed
66.38 (1) If a consumer proposal is fully performed, the administrator shall issue a certificate to that effect, in the prescribed form, to the consumer debtor and to the official receiver.
Marginal note:Effect if counselling refused
(2) Subsection (1) does not apply in respect of a consumer debtor who has refused or neglected to receive counselling provided under paragraph 66.13(2)(b).
57. (1) Paragraphs 67(1)(b) and (b.1) of the Act are replaced by the following:
(b) any property, other than property in a registered retirement savings plan or a registered retirement income fund, as those expressions are defined in the Income Tax Act, or in any prescribed plan, that as against the bankrupt is exempt from execution or seizure under any laws applicable in the province within which the property is situated and within which the bankrupt resides,
(b.1) goods and services tax credit payments that are made in prescribed circumstances to the bankrupt and that are not property referred to in paragraph (a) or (b),
(b.2) prescribed payments relating to the essential needs of an individual that are made in prescribed circumstances to the bankrupt and that are not property referred to in paragraph (a) or (b),
(b.3) subject to any prescribed conditions and limitations, property in a registered retirement savings plan or a registered retirement income fund, as those expressions are defined in the Income Tax Act, other than property contributed to any such plan or fund in the 12 months, or in any longer period that the court may specify, before the date of bankruptcy,
(2) Paragraph 67(1)(c) of the Act is replaced by the following:
(c) all property wherever situated of the bankrupt at the date of the bankruptcy or that may be acquired by or devolve on the bankrupt before his or her discharge, including any refund owing to the bankrupt under the Income Tax Act in respect of the calendar year — or the fiscal year of the bankrupt if it is different from the calendar year — in which the bankrupt became a bankrupt, except the portion of any such refund that is not subject to the operation of this Act, and
58. (1) Subsections 68(1) to (7) of the Act are replaced by the following:
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”
« revenu excédentaire »
“surplus income” means the portion of the total income of an individual bankrupt that exceeds that which is necessary to enable the bankrupt to maintain a reasonable standard of living, having regard to the applicable standards established under subsection (1).
“total income”
« revenu total »
“total income”, for the purposes of the definition “surplus income”,
(a) includes, despite paragraphs 67(1)(b) and (b.1), all of a bankrupt’s revenues from whatever nature or source that are received by the bankrupt between the date of the bankruptcy and the date of the bankrupt’s discharge, including any amounts received as damages for wrongful dismissal, as a pay equity settlement or under any Act of Parliament or Act of the legislature of a province that relates to workers’ or workmen’s 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.
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 trustee has informed the creditor of the amount fixed under subsection (4) or (5.1), the trustee shall, within five days after the 30-day period, 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.
(2) Subsection 68(10) of the Act is replaced by the following:
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.
(3) Subsection 68(12) of the Act is replaced by the following:
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.
(4) Subsection 68(14) of the Act is replaced by the following:
Marginal note:Property included for enforcement purposes
(14) For the purpose of this section, a requirement that a bankrupt pay an amount to the estate of the bankrupt is enforceable against all the bankrupt’s property, including property referred to in paragraphs 67(1)(b) and (b.1).
Marginal note:When obligation to pay ceases
(15) If an opposition to the automatic discharge of an individual bankrupt who is required to pay an amount to the estate of the bankrupt 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 an amount that the court considers appropriate to the estate of the bankrupt.
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