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Bankruptcy in Canada is governed by the Bankruptcy & Insolvency Act, enacted for the first time in 1919. Under this act, private individuals or companies, called trustees in bankruptcy, are appointed to administer each bankruptcy.
To ensure that all trustees in bankruptcy treat everyone fairly, in 1932 the Office of the Superintendent of Bankruptcy, a division of the federal government, was created to oversee and monitor all trustees in bankruptcy.
The bankruptcy system in Canada still operates in the same way today. The federal government sets the rules, and private trustees administer the rules. As a result, if an individual decides they need to declare bankruptcy in Canada, they can select the trustee in bankruptcy who will administer their bankruptcy estate.
Even though the debtor selects their own trustee in most cases, the trustee does not work for the debtor. The trustee assists all parties involved, including the debtor, the creditors, the court, and representatives of the Office of the Superintendent of Bankruptcy.
In effect, the trustee in a bankruptcy in Canada is like the referee in a hockey game. They don’t work for either side; their job is to make sure all sides understand and follow all of the rules, so that the bankruptcy can be completed as quickly and efficiently as possible.
As the levels of debt in Canada have increased, the level of personal bankruptcy in Canada has also increased, so that each year over 100,000 individuals file a personal bankruptcy or a consumer proposal in Canada.
An even greater percentage of the population files for bankruptcy in the United States, as described in our article about Bankruptcy in America.
Most people find it difficult to realize that they have more debt than they can handle, and they need a plan to deal with their debt. For many people, bankruptcy is that plan.
If you have any doubts, or what more information, please contact our bankruptcy trustee for more information and a free initial consultation.
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