Business Bankruptcy in Canada
There has been an increasing trend of owners in Canada who are filing for business bankruptcy as a last resort of protection. A business can elect to declare business bankruptcy when they have more than one thousand dollars of outstanding debt and are unable to meet the financial obligations regarding those debts. A business bankruptcy is typically filed when a company is in dire straits and would not be able to repay their financial debts even is all of the business assets were sold before business bankruptcy was declared.
How to File for Business Bankruptcy
There are three main ways that a business bankruptcy can take effect and be enforced in Canada. The main way that almost all companies declare business bankruptcy is through a voluntary declaration of bankruptcy. The other two ways in which a business can declare bankruptcy include a failed petition to creditors that forces the company into bankruptcy and lastly the creditors themselves can file through the court to drive a company into business bankruptcy.
When a business has decided that they to file for the protection of a business bankruptcy they will need to contact a bankruptcy trustee. The trustee will then arrange for the sale of company assets which will they be split amongst the creditors that the business owes funds. When you are preparing to declare a business bankruptcy it is always a good idea to speak with a bankruptcy lawyer who can review your situation and make recommendations.
