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.
When businesses file for bankruptcy or seek to file a commercial proposal, they cannot proceed through these processes without the help of a Licensed Insolvency Trustee (LIT). During insolvency proceedings, LITs play a very important role in working to resolve the debt and satisfy creditors.
If a business is in debt and cannot repay its creditors, it can file a Division I proposal. This proposal is essentially an offer to the creditors, in which the debtor offers to pay a portion of the debt over time without filing for bankruptcy.