Bankruptcy and insolvency
The RCMP Commercial Crime Sections cooperate with the Superintendent of Bankruptcy to help maintain the integrity of the Canadian bankruptcy and insolvency system by investigating related criminal activities.
The insolvency process is a legal proceeding under the provisions of the Bankruptcy and Insolvency Act , an act that is administered by the Office of the Superintendent of Bankruptcy. If a person or company is unable to meet its debt obligations, it is said to be insolvent. When that happens, there are three main options under the Act:
- Assets of an individual or company are liquidated and the proceeds are given to people who are owed money.
- An offer is made to people who are owed money in an effort to settle the debt.
- A secured creditor (often a bank or other large creditor represented by a receiver) comes in and generally takes control of the assets of the company. This usually applies to companies, not individuals
There are also three main players:
- The person or company that owes the money.
- The person or company that is owed the money.
- The people who are licensed to administer the proceedings.
Most crimes in this area are committed by debtors when they hide or dispose of assets fraudulently, before or after being bankrupt; or when they fail to comply with the duties of a bankrupt.
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