Bankruptcy can really hit any corporation out there. It is mostly managed by the BIA either if it was formed an assignment into bankruptcy or there is an opposing bankruptcy order to it.
There are several factors that denote if we can consider insolvency on a corporation under BIA.
- The inability to achieve its obligations as they are already due
- There is a stoppage of current obligations payments allowing them to reach their due dates
- There is an insufficient number of a corporation’s property. This is important because the payment of obligations is reliant on the amount of property that a company has
The Process of Business and Consumer Bankruptcies
The BIA is not that particular in determining small enterprises, corporate, and consumer bankruptcy. So it is safe to say that the process of bankruptcy under the BIA performs similarly for both enterprises and individuals.
To give you an idea about the basic process, we’ll tackle it in bulleted points below:
- There is a voluntary seeking of bankruptcy for the concerned business
- Liquidation of the assets, as well as distribution to the creditors, take place
- There is an ongoing turnover of the business assets
Several differences are actually present and they are the following:
- The process is made simple: Individuals have access to the simpler consumer proposal and summary administration
- Assignments: There might be an issue if who has the right to give a decision for an assignment. Usually, a business receiver must ensure that a leave of the court will be sought. This is essential for a bankruptcy voluntary assignment to be possible
- Property Exemption: For people and business owners, a property can be considered exempt from getting seized and creditors’ distribution. However, this is not applicable to corporations.
- Saving a Portion of Income: There is somehow a part of the income stored to ensure that the standard of living will not get affected. The standards are within the ones set by the Office of the Superintendent of Bankruptcy. However, you must pay to the LIT all the surplus income that you’ve had.
- Bankruptcy Discharge: As we all know bankruptcy discharge will eventually happen to the affected individuals. Moreover, if there is no opposition, bankruptcy is instantly discharged for the first-timers.
Recap
There are lots of processes that are involving bankruptcy. It might take time for you to understand all the fundamentals but with the help of professionals, it can be easier. We at Business Bankruptcy Alberta have the capability to provide assistance regarding bankruptcy matters.
Our team has the knowledge because of the in-depth experience that we have. We’ll be happy to assist you with your concerns, do not hesitate to send us a message for more info.