Bankruptcy Definitions Glossary

The following glossary is intended to aid readers in understanding the terminology used on this Ontario-based website. The definitions provided here are general interpretations, not legal definitions. If you have specific questions, please reach out to us. If you’re interested in using these definitions for educational, institutional, or business purposes, please contact us. For further details, please call us at 416-665-3328 or send us an email.

Administrator
An individual appointed by the Superintendent of Bankruptcy, tasked with overseeing the execution of a consumer proposal under the Bankruptcy and Insolvency Act.

Bankruptcy
A lawful procedure, guided by the Bankruptcy and Insolvency Act, that allows discharge from most debts.

Creditor
An entity or individual to whom a debt is owed. In the context of insolvency, it refers to a person, partnership, or corporation recognized by law as having the same rights and duties as a natural person, with a provable claim under the Bankruptcy and Insolvency Act.

Debt
An agreed-upon or otherwise due sum of money.

Debtor
An individual or entity who owes money to another party.

Discharge from Bankruptcy
The release of a debtor from their obligation to repay their debts. Discharge may be automatic, suspended, conditional, or absolute, and can sometimes be refused.

Estate
A person’s total property; the file in bankruptcy.

Insolvency
The state of being unable to meet debts as they are due or having liabilities that surpass the total value of assets.

Interest
The amount earned or paid for borrowing or lending money.

Secured Credit/Debt
Secured credit refers to a debt arrangement where the debtor has provided a tangible asset (collateral) as a guarantee to the creditor. This collateral could range from savings bonds, vehicles, furniture, to real estate properties.

Seizure
The lawful act of claiming possession of an asset.

Surplus Income
The portion of a bankrupt individual’s income required to be contributed to the bankruptcy estate during the bankruptcy, as per standards set by the Office of the Superintendent of Bankruptcy.

Licensed Insolvency Trustee
An individual licensed by the Superintendent of Bankruptcy to manage bankruptcy and proposal estates.

Unsecured Credit/Debt
Unsecured credit denotes a debt agreement where the debtor hasn’t pledged any collateral to the creditor. Most credit cards and lines of credit fall into this category. Services like utilities and cable are typically unsecured too.