Bankruptcy Definitions

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These definitions below are provided solely for the purpose of facilitating the reader’s understanding of the terms used on this website. They are general interpretations only and are not to be considered legal definitions. If you have a specific question please let us know. If you would like to use our questions for educational, institutional, or business purposes please let us know. For additional information please call us at 416-665-3328 or email.

A person designated by the Superintendent of Bankruptcy, responsible for the administration of a consumer proposal under the Bankruptcy and Insolvency Act.

Bankruptcy is a legal process, regulated by the Bankruptcy and Insolvency Act, by which you may be discharged from most of your debts.

One to whom a debt is owed; in insolvency matters, a person (an individual), a partnership, and a corporation that is recognized by law as having the same rights and duties as a natural person) having a claim provable under the Bankruptcy and Insolvency Act.

A specific sum of money due by agreement or otherwise.

One who owes money to another.

Discharge from bankruptcy
The release of a debtor from the obligation to repay his or her debts. A bankrupt’s discharge may be automatic, suspended, conditional or absolute. A bankrupt may also be refused discharge.

All the property of a person; the file in bankruptcy.

The condition of being unable to pay debts as they become due, or in the ordinary course of business, or having liabilities that exceed the total value of assets.

The amount paid or earned for the use of money.

Secured credit / debt
Secured credit is when you have promised something concrete to a creditor if you do not pay your debts as agreed to in your contract. The item you promised is called the security or collateral. Security can be money or property such as savings bonds, vehicles, furniture, or a house.

The act of taking possession of property by legal right or process.

Surplus income
The portion of an individual bankrupt’s income that is required to be paid into the bankruptcy estate during the bankruptcy as per standards established by the Office of the Superintendent of Bankruptcy.

Licensed Insolvency TrusteeĀ 
A person licensed by the Superintendent of Bankruptcy to administer bankruptcy and proposal estates.

Unsecured credit / debt
Unsecured credit means there is nothing you have promised to give the creditor if you do not pay your debts. Most credit cards and lines of credit are unsecured. Services like utilities and cable are also usually unsecured.

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