Section 67(1) of the Bankruptcy and Insolvency Act (the "BIA") describes the property of the bankrupt that will, and will not, be divisible among the bankrupt's creditors. Exceptions include under section 67(1)(b) "any property that ... is exempt from execution or seizure under any laws applicable in the province within which the property is situated and within which the bankrupt resides." These exemptions, often subject to monetary limits, may include the equity in a vehicle or real property occupied by the bankrupt.
Exempt Assets and Discharge from Bankruptcy
Critical illness benefit payment determined to be compensation for "pain and suffering" and exempt from distribution in bankruptcy.
Upon assignment into bankruptcy, a bankrupt's property vests in the bankruptcy trustee to be distributed to creditors. However, the courts have identified certain exceptions to this general principle, including in a recent decision out of Alberta.
Court costs awarded against trustee in bankruptcy personally
The general rule in court proceedings is that the losing party must pay the successful party's costs: not their actual legal costs, but a contribution to those costs based on a tariff of charges.
Where one of the combatants is a trustee in bankruptcy, the Bankruptcy and Insolvency Act provides that the trustee is not personally liable for such costs; any award of costs against the trustee must be satisfied from the assets in the bankruptcy estate.
No New Consideration Required for Modification to an Agreement
In a recent case out of the BC Court of Appeal, Rosas v Toca 2018 BCCA 191, the court altered the law surrounding contractual modifications to an existing agreement. Until now, in order for a modification to an existing contract to be legally binding, it has been required that there be some new consideration flowing between the parties. Consideration has been required in order to draw the line between gratuitous or morally based promises and those that were legally enforceable.
Examination of bankrupts
When a debtor becomes bankrupt, there may be suspicion as to whether the bankrupt has made full disclosure of all assets or dealings with the bankrupt's assets prior to the bankruptcy. The bankrupt's conduct prior to discharge may also be in issue. The trustee in bankruptcy has the obligation to make inquiries, but if the bankrupt is uncooperative, or if information is required from someone other than the bankrupt, more aggressive steps may be required.
Secured lenders receiving payments in good faith without notice obligated to remit debtor's unpaid GST
A recent decision of the Federal Court of Canada should stand as a reminder that a borrower's unpaid taxes can take priority over secured lenders.
In Her Majesty the Queen v the Toronto-Dominion Bank, 2018 FC 538, the debtor had unpaid GST debts of approximately $68,000. In 2010, the debtor obtained loans from the Toronto-Dominion Bank (the "Bank"), all of which were secured against his home.
A Bank's Obligation to Act In Good Faith
In a recent case out of the Quebec Superior Court, Pourshafiey v Toronto-Dominion Bank 2018 QCCS 3202, a former client of the Toronto-Dominion Bank, Hossein Pourshafiey, sought an injunction and damages against TD Bank when TD Bank, without explanation, ended its banking relationship with him and his company. TD Bank provided 30 days' notice that it was closing a number of his and his company's accounts, 60 days' notice of closing his home equity line of credit, and no notice that it was closing the wire service that Mr. Pourshafiey's company relied upon in order to be able to transfer money to and from Iran for its clients - the crux of its business.
Further signs of Vancouver's real estate declining
The latest statistics show continuing slackening in Vancouver's residential real estate market. While signs of a slowdown in the single family detached market have been growing for some time, the latest figures point to the same trends beginning in the condo market as well.
Fraudster unable to unwind own fraud
People facing claims they want to avoid will sometimes be tempted to engage in fraud or lies to remove their assets from the reach of creditors. This temptation should be resisted, as such misconduct can lead to additional claims and even criminal charges.
Exemption of RRSP and RRIF accounts from seizure
Retirement savings, whether held in an RRSP or RRIF, are generally exempt from seizure, subject to some exceptions. Understanding these exceptions is important for both debtors and creditors.
