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September 2016

Complications intensify as housing co-op struggles with insolvency

Coquitlam's Hoy Creek Housing Co-operative has been in financial difficulty for years. Consisting of 97 apartments and 60 abandoned townhouses, the corporation owes the Canadian Mortgage and Housing Corporation (CMHC) over $4.2 million, including mortgage arrears of $300,000.

When bankruptcy benefits secured creditors

Secured creditors generally operate outside of bankruptcy proceedings. Not only may they continue to realize upon their security while unsecured creditors seek payment of their debts in bankruptcy, but secured creditors can actually benefit from a debtor's bankruptcy in at least three different ways.

Contempt motions can be stayed by bankruptcy proceedings

A debtor owes money and is ordered to attend a judgment debtor examination. The debtor fails to show up. The creditor subsequently seeks an order requiring the debtor to attend an examination and to produce a number of relevant documents. On the day before the scheduled examination, the debtor files for bankruptcy and then shows up at the examination, taking the position that the order is automatically stayed under the provisions of the Bankruptcy and Insolvency Act (BIA). Can the debtor be held in contempt of the order?

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