Duties of a Bankrupt – Explained

 

Below is Section 158 of the Bankruptcy & Insolvency Act.  This section of the Act, outlines the Duties of Bankrupts. 

 

We’ll add our notes at the end of each line in bold to hopefully make it easier to understand

158. A bankrupt shall

(a) make discovery of and deliver all his property that is under his possession or control to the trustee or to any person authorized by the trustee to take possession of it or any part thereof; Tell the trustee about all of your assets and delivery it to the trustee if the trustee is going to take over possession.

(a.1) in such circumstances as are specified in directives of the Superintendent, deliver to the trustee, for cancellation, all credit cards issued to and in the possession or control of the bankrupt; Hand over your credit cards

(b) deliver to the trustee all books, records, documents, writings and papers including, without restricting the generality of the foregoing, title papers, insurance policies and tax records and returns and copies thereof in any way relating to his property or affairs;  If the trustee requests them, hand over any documents relating to your assets such as insurance and/or ownership documents

(c) at such time and place as may be fixed by the official receiver, attend before the official receiver or before any other official receiver delegated by the official receiver for examination under oath with respect to his conduct, the causes of his bankruptcy and the disposition of his property; It’s rare, but if an examination is requested, you must attend it

(d) within five days following the bankruptcy, unless the time is extended by the official receiver, prepare and submit to the trustee in quadruplicate a statement of the bankrupt’s affairs in the prescribed form verified by affidavit and showing the particulars of the bankrupt’s assets and liabilities, the names and addresses of the bankrupt’s creditors, the securities held by them respectively, the dates when the securities were respectively given and such further or other information as may be required, but where the affairs of the bankrupt are so involved or complicated that the bankrupt alone cannot reasonably prepare a proper statement of affairs, the official receiver may, as an expense of the administration of the estate, authorize the employment of a qualified person to assist in the preparation of the statement;  Make sure you tell the trustee about all your assets and debts and the trustee will then prepare the necessary paperwork required for filing.

(e) make or give all the assistance within his power to the trustee in making an inventory of his assets; Help the trustee to list all your assets if required

(f) make disclosure to the trustee of all property disposed of within the period beginning on the day that is one year before the date of the initial bankruptcy event or beginning on such other antecedent date as the court may direct, and ending on the date of the bankruptcy, both dates included, and how and to whom and for what consideration any part thereof was disposed of except such part as had been disposed of in the ordinary manner of trade or used for reasonable personal expenses; Tell the trustee about any assets you disposed of or sold within the year leading up to the bankruptcy

(g) make disclosure to the trustee of all property disposed of by gift or settlement without adequate valuable consideration within the period beginning on the day that is five years before the date of the initial bankruptcy event and ending on the date of the bankruptcy, both dates included; Tell the trustee about any gifts or assets you ‘gave away’ within the 5 years leading up to the bankruptcy

(h) attend the first meeting of his creditors unless prevented by sickness or other sufficient cause and submit thereat to examination; Similar to an examination, it’s rare, but if a first meeting of creditors is called, you must attend

(i) when required, attend other meetings of his creditors or of the inspectors, or attend on the trustee; Attend any other meetings that are called for relating to the bankruptcy

(j) submit to such other examinations under oath with respect to his property or affairs as required; Similar to part c, if an examination is called, you must attend

(k) aid to the utmost of his power in the realization of his property and the distribution of the proceeds among his creditors; If the trustee is required to take an asset and sell it for the benefit of your creditors, help the trustee to do so.

(l) execute any powers of attorney, transfers, deeds and instruments or acts that may be required; Similar to part k, assist the trustee where required

(m) examine the correctness of all proofs of claims filed, if required by the trustee;  You have the right to check the claims against you (the debts you owe).  The trustee may ask you verify if a claim against you is correct.

(n) in case any person has to his knowledge filed a false claim, disclose the fact immediately to the trustee; If you believe someone is ‘making up’ a debt or is saying the debt you owe is greater than it actually is, tell the trustee

(n.1) inform the trustee of any material change in the bankrupt’s financial situation; If your income drastically changes during the bankruptcy (up or down), or if you accumulate assets during the bankruptcy, tell the trustee. 

(o) generally do all such acts and things in relation to his property and the distribution of the proceeds among his creditors as may be reasonably required by the trustee, or may be prescribed by the General Rules, or may be directed by the court by any special order made with reference to any particular case or made on the occasion of any special application by the trustee, or any creditor or person interested; and  Similar to part k, If the trustee is required to take an asset and sell it for the benefit of your creditors, help the trustee to do so and also be prepared to help the trustee with anything else they may need help with during the bankruptcy.

(p) until his application for discharge has been disposed of and the administration of the estate completed, keep the trustee advised at all times of his place of residence or address. Make sure the trustee knows how to contact you at all times during the bankruptcy (either by phone, email, mailing address)

 In addition to the above duties, Section 157.1 (3) states:

Subsection 168.1(1) does not apply to an individual bankrupt who has refused or neg­lected to receive counselling.  This means, if you don’t attend two credit counselling sessions, you can’t receive an automatic discharge from the bankruptcy.