Even the best financial minds in Ontario can sometimes find themselves experiencing fiscal difficulties. Unexpected life changes cannot be prevented or even fully prepared for. When they occur, they may quickly send things in a difficult direction. However, debt relief options exist, including bankruptcy, which could be key in providing an individual facing strained circumstances with a fresh financial start.
Many Ontario creditors have faced circumstances in which high-net-worth clients evade debt and systematically hide assets. Some even go as far as committing bankruptcy fraud. When company owners stand to lose hundreds of thousands of dollars, they may feel there is no way out and that their businesses might be in jeopardy.
When considerable assets have accumulated, considering options for protecting one's wealth is important. Individuals and businesses have a number of options to safeguard certain assets from creditors and other monetary judgements. These methods may protect assets in the event that the debtor later becomes insolvent.
With unmanageable debt, individuals and businesses often find themselves in grave situations with their creditors. One of the most formidable situations is when owing a tax debt to the Canada Revenue Agency.
In cases where unpaid goods have been delivered to a debtor, suppliers may draw upon a remedy under the Bankruptcy and Insolvency Act (BIA). The remedy is strictly regulated by s. 81.1 of the BIA, and applies to debtors who are in receivership or bankruptcy. To make use of this remedy, suppliers must heed a number of conditions and time limits.
Some companies that owe $5 million or more may be able to draw on provisions in the Companies' Creditors Arrangement Act to manage their debt while avoiding bankruptcy. The legislation allows such companies to continue operating their businesses while attempting to negotiate financial compromises or alternative repayment arrangements with their creditors.
Where an individual or business owes creditors money, but does not have the ability to repay debts on time as they become due, the debtor is facing insolvency. The business may draw on two possible options for dealing with the debt: bankruptcy or a creditor proposal.