Glossary of Terms
Arm's Length — The act of dealing with a person who is not a relative but an independent third party.
Assets — The economic resources or items of value belonging to the debtor. These include, but are not limited to, cash, accounts receivable, inventory, investments, personal household effects, automobiles, houses, land, etc.
Assignment into Bankruptcy — The act of a person who voluntarily places himself, herself, or a company into bankruptcy pursuant to the Bankruptcy and Insolvency Act.
B.I.A. — The Bankruptcy and Insolvency Act.
Bailiff — A person, appointed under provincial legislation, who will act or assist any other person to repossess, cease or distrain pursuant to conditions set out in various Acts.
Fair Market Value — The hypothetical value of a piece of property, given a willing purchaser and a willing vendor, and a reasonable amount of time for the property to be exposed to sale.
Inspector — Individual(s) appointed to authorize and direct Trustees in the administration of estates, pursuant to the Bankruptcy and Insolvency Act.
Interim Receiver — A person appointed by the Court to be a watchdog regarding the assets of a debtor during that time between the application to the Court for a Receiving Order and the time where the Receiving Order is handed down. An Interim Receiver may also be appointed where a secured creditor is about to send out, or has sent out, a Notice of Demand under the Bankruptcy and Insolvency Act of its intention to enforce its security, or the debtor has filed a Notice of Intention to Make a Proposal or has filed a proposal.
Liabilities — The financial obligations of the debtor. These include, but are not limited to, mortgages, car loans, lines of credit, credit card debts, leases, taxes owing, student loans, loans from friends, contingent debts, etc.
Official Receiver — A person deemed to be an officer of the Court who reports to the Superintendent of Bankruptcy and performs duties as specified by the Bankruptcy and Insolvency Act. This has nothing to do with Receivership.
Ordinary Unsecured Creditor — A general creditor who has no priority, no preferred treatment and no security.
Petition for a Receiving Order — An application by a creditor to the Court for an Order adjudging a debtor bankrupt.
Preferred Creditor — Those creditors who, pursuant to Section 136 of the Bankruptcy and Insolvency Act, rank ahead of ordinary unsecured creditors. Preferred creditors include employees for wages and landlords for rent.
Proposal — An offer to creditors to settle one's debts under other than the existing terms.
Receiver or Receiver Manager — A person or corporation appointed by a party who holds a security agreement, or by Court Order, giving the appointed party the authority to take possession of the assets specified in the security agreement or Court Order.
Receiving Order — An Order made by the Court following the successful petition to have a person or company placed into bankruptcy. This is not a Receivership term.
Security Agreement — An agreement between a lender and a debtor providing for something to be given or pledged to a person who is lending money in order to secure or guarantee payment of the debt.
Settlement — The transferring of property to another person or a gift. Under certain circumstances, settlements are void against the Trustee and are brought back into the bankruptcy estate.
Statement of Affairs — The listing of a debtor's assets and liabilities and sworn under oath by the debtor before a lawyer or Commissioner for Taking Oaths.
Superintendent of Bankruptcy — The person appointed by the Federal Government to supervise the administration of insolvency estates in Canada.
Trustee in Bankruptcy — An individual or corporation licensed by the Superintendent of Bankruptcy pursuant to the Bankruptcy and Insolvency Act.
Unsecured Creditor — A creditor who holds no security but is either preferred or ordinary.
