Running a business involves many risks and challenges. If your business is in a precarious financial position and restructuring won’t get you back on track, commercial bankruptcy may be the best option. It can allow you to cease operations with dignity and save you money on management and accounting fees. At Bernier & Associates, our licensed insolvency trustees in Gatineau and Ottawa can walk you through the bankruptcy process.
Here’s an overview of the steps involved in commercial bankruptcy.
Meeting with a licensed insolvency trustee (LIT)
The purpose of the initial meeting is to analyze your business’s financial situation. The LIT will determine if commercial bankruptcy is your best option or whether you can improve your finances in other ways. For example, you may be able to reach a repayment agreement with your creditors. If bankruptcy is indeed the only option, you’ll move on to the next step.
Filling out bankruptcy papers
Filing for bankruptcy requires you to fill out and complete several documents, including contracts, invoices, claims lists and balance sheets. Once you’ve signed all the appropriate legal documents, your LIT will take over the next steps.
Registering for bankruptcy
Your licensed insolvency trustee will file the required documents with the Office of the Superintendent of Bankruptcy (OSB) to officially initiate the bankruptcy process. From that moment on, your LIT will take possession of your company’s assets to compile an inventory list. According to the Bankruptcy and Insolvency Act (BIA), your LIT has the right to access anywhere your business operates and holds assets.
Putting assets up for sale
After being appraised by a professional, your company’s assets can be sold in various ways, including through a call for tenders or an auction. Each transaction must be recorded.
Repaying creditors
Once your assets have been sold and converted into cash, your LIT will pay back your creditors. They’ll distribute the funds according to the collocation plan established by the BIA. This means that certain government debts (such as source deduction), employee wage claims will be paid out first.
Closing the file
Once all of the above steps have been completed, your LIT will prepare the final statement and send it to the OSB for approval. Once approved, the file is considered complete and closed.
Is your business in debt? Do you want to protect it from creditors? Meet with a licensed insolvency trustee from Bernier & Associates in Gatineau or Ottawa. They’ll analyze your business’s financial situation and determine if declaring bankruptcy is the best option. Schedule an appointment today.