Some of the bankruptcy law changes have gone into force today, Monday, July 7, 2008

Bill C-12 - an Act to amend the Bankruptcy and Insolvency Act, the Companies’ Creditors Arrangement Act, the Wage Earner Protection Program Act and Chapter 47 of the Statutes of Canada, 2005 has received Royal Assent.

The Conservative government reinstated the Bankruptcy Reform package on Thursday, October 25, 2007, in a motion that was approved by all parties.

Bill Introduced on May 29, 2007 to Change Student Loan Non-Dischargeability in a Bankruptcy from 10 Years to Two Years.

Insolvency professionals and everyone interested in a fair and just bankruptcy system will be very upset with the proposed change to RRSPs since the change in wording governing the exemption of RRSPs opens the system up to abuse.

The Minister of Labour, Jean-Pierre Blackburn introduced a ways and means motion on December 11, 2006, to introduce an Act to amend the Bankruptcy and Insolvency Act, the Companies’ Creditors Arrangement Act, the Wage Earner Protection Program Act and chapter 47 of the Statutes of Canada, 2005.

The Canadian Association of Insolvency and Restructuring Professionals (CAIRP) advised their members today that it is highly unlikely that the changes to the Bankruptcy and Insolvency Act will be proclaimed prior to 2007.

We like the changes to the bankruptcy laws which: 1) Cancels the stay of proceeding when the trustee is discharged; 2) Prevents lenders from cancelling certain contracts when a person files bankruptcy or a proposal; 3) Requires debtors to attend counselling before a consumer proposal is completed and the remaining debt erased and 4) Raises the threshold for consumer proposals from $75,000 to $250,000.

We like most of the new law on RRSPs because it rights an unfairness that exists in the different treatment of people who save for their retirement via RRSPs (often self-employed individuals) and those employees who save for their retirement via employer-sponsored plans.

It is recognized in Canada that, to promote a fresh financial start, the bankrupt has to maintain a degree of dignity and be allowed to keep some equity in key assets so he and his family have a starting point from which to rebuild their financial lives.