You Owe Money—
Rights and Responsibilities of Creditors, Licensed Insolvency Trustees and the Office of the Superintendent of Bankruptcy (OSB)

Creditors

A creditor can oppose a bankrupt's discharge from bankruptcy. The grounds for opposition are set out in section 173 of the Bankruptcy and Insolvency Act (BIA). The creditor must notify the Licensed Insolvency Trustee (LIT) and the bankrupt of his/her opposition and the reasons for it, and must present evidence to the Court to support his/her arguments. In such cases, after hearing the parties, the Court will decide on the type of discharge for the bankrupt. Learn more about bankruptcy discharge and its consequences for the bankrupt

A creditor may also inform the LIT of any inappropriate transactions or preferential treatment on the part of the bankrupt that harmed his/her interests and those of other creditors. For example, a creditor may have knowledge of assets or transactions that the bankrupt failed to declare.

If a creditor suspects misconduct on the part of the bankrupt or fraudulent activities in connection with a bankruptcy file, he/she should contact the OSB at the following toll-free number: 1-877-376-9902.

Licensed Insolvency Trustees (LITs)

About Licensed Insolvency Trustees

If an LIT observes that a bankrupt is not respecting the law, the LIT:

  • Must report to the OSB that he/she has reason to believe that an offence has been committed by the bankrupt;
  • Must analyze preferential payments made by the bankrupt;
  • May ask the Court to make a ruling on the bankrupt's transactions;
  • Must prepare a report, at the time of the bankrupt's discharge, dealing in particular with the bankrupt's conduct and how the bankrupt fulfilled his/her obligations;
  • May oppose the bankrupt's discharge.

Office of the Superintendent of Bankruptcy

The OSB conducts an investigation when it has reasonable grounds to believe that an offence has been committed in the context of a bankruptcy. The investigation deals with the bankrupt's conduct and transactions, the causes of the bankruptcy, and what became of the bankrupt's property. Investigations are conducted by one of the OSB's three special investigation units or by the Royal Canadian Mounted Police.

In addition, the OSB can oppose a bankrupt's discharge if it believes that the bankrupt has committed an act of misconduct within the meaning of the BIA.

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