When to go bankrupt?
In the current situation, a few factors may be warning signs of a possible bankruptcy. How would you answer these questions:
- Are you able to reduce your debt?
- Have you borrowed to pay off old debts?
- Are you able to pay all your current debts at the end of the month?
- Are you able to pay your rent?
- Are you paying the minimum due on your credit card?
Did you recognize yourself? It might be time to consult our professionals.
The consequences of commercial bankruptcy in Quebec
The effects on your business may vary, depending on whether you have a sole proprietorship, corporation or cooperative.
Taking the bankruptcy route has many advantages for your company and its management:
- Say goodbye to all the legal collection processes your creditors have launched against your business;
- Be protected. Any legal proceedings that your creditors may try to initiate against your company will be stopped;
- Less panic, less stress. Our licensed trustees are here for you. They take care of your debts and the steps with the creditors, you will not forget anything and have peace of mind.
In contrast, the two biggest negative consequences of your company’s bankruptcy are the cessation of business operations and the taking of possession of the company’s assets by the trustee administering the bankruptcy. The latter will have to transform the said assets into cash before distributing them to the creditors of your company in the order of priority. In order to do so, he will have to liquidate them in a strict and orderly manner.
At this stage, the liability of your partners for debts incurred is unlimited, i.e. the personal assets of the partners can be seized in the same way as the assets of your business. The bankruptcy of your company can therefore lead to the personal bankruptcy of your partners, just as they could lead to the bankruptcy of your organization as an individual.
Perhaps your company is not at that point. Your situation could result in other solutions, such as:
- Voluntary liquidation
- The recovery plan
- The concordant proposal
Schedule a meeting with one of our
experts
FREE CONSULTATION
Without commitment. Confidential.
The authorized insolvency trustee is governed by a code of ethics. He will keep you informed of all the steps surrounding your situation and ensure that you feel the minimal impact of bankruptcy or another suggested option.
Contact us so that one of our professionals can evaluate your situation.
The consequences of commercial bankruptcy in Quebec
Commercial bankruptcy can have different effects on your business, it can put an end to your company’s operations and it can also have consequences on its directors. If you have a sole proprietorship, corporation or cooperative, the impact may vary.
Although it may not seem like a good idea, the path to business failure can introduce many benefits for your company and its management.
Put an end to
all legal collection actions against your company;- Notice of stay that protects possible legal proceedings that your creditors may try to initiate against the company. These will be stopped.
Realization of assets for the benefit of creditors,
in a legal and orderly context.
Order of collocation and distribution to creditors
according to a codification provided for in the law.- Suspension of government appeals.
Our licensed trustees are here for you. They will take charge of your debts and deal with the creditors. You won’t have to forget anything, you can have peace of mind.
Negative consequences of commercial bankruptcy
There are certainly negative consequences of bankruptcy. First of all it is the end of the activities for the company. Other consequences include:
- Loss of your investment in the company both in time and money;
- Taking possession of the company’s assets by the trustee administering the bankruptcy;
- Sale of assets in a bidding process;
- Revision of the last dispositions in the months preceding the bankruptcy if they were not made in the normal course of business;
- Liability of directors for certain tax debts and endorsements.
The authorized insolvency trustee is governed by a code of ethics. He or she will keep you informed of all the steps involved in your situation and will be able to advise you if there are any consequences of the company’s bankruptcy on your personal finances.
Do you have any questions? We have the answers.
When to go bankrupt?
In the current situation, a few factors may be warning signs of a possible bankruptcy. How would you answer these questions?
- Are you able to reduce your debt? Is the company able to meet its obligations as they fall due? Are you paying the minimum due on your credit card?
- Do you need to negotiate new credit facilities to pay off past debts? Have you borrowed to pay off old debts?
- Are you able to pay all your current debts at the end of the month?
- Are you able to pay your rent on time? Equipment rentals ? Leases?
- Have you lost any important customers?
- Do you have clients who refuse to pay you?
- Have you lost a product distribution right?
- Are you facing unfair competition?
If your answer to these questions was more often yes than no, it may be time to consult our professionals.
How do you know if a company is in financial difficulty?
Do your suppliers call you every day to get their payments? They refuse to deliver goods? Is your inventory higher than your sales? While this may only be temporary, there are several signals that may indicate financial difficulties.
- The company borrows to pay debts
- The sales are not there
- Operating costs are high and there is no gross profit margin.
A licensed insolvency trustee can be the key to managing your anxieties… and the company’s debts.
What is a concordat proposal?
In Canada, a proposal is described as a plan that a debtor proposes to its creditors. The goal is to reduce the debt burden while continuing to operate the business.
Only a trustee authorized in insolvency is empowered by law to file a proposal with the company’s creditors.
What are the effects on a corporation?
By law, a corporation is considered a separate legal entity. The shareholders lose their investment in the company, but are not responsible for the debts.
+ Personal responsibility? Our experts will help you determine if you are liable as a director or guarantor for some of the company’s debts. In fact, it may be that an alternative to bankruptcy is beneficial to your situation. Count on our team to help you.
What are the effects on a cooperative?
The members’ capital will be lost, but for the rest it is like a commercial bankruptcy. The members of its board of directors shall be liable for the statutory debts.
What are the effects on a general or limited partnership?
In the event of bankruptcy of a general or limited partnership, the partners are liable for the debts incurred. This responsibility is unlimited. Therefore, the personal assets of the partners can be seized.
Consult our professionals to find out THE solution for your financial situation.
All our solutions
Do you want to take control of your finances and leave with your head held high?
We are here to accompany you through this ordeal.
Declaration of bankruptcy
Get out of debt
and get back on track financially.
Consumer proposal
Avoid bankruptcy and eliminate
up to 50% of your debts.
Debt consolidation
Get a loan from a financial institution and combine all your debts into one payment.
Voluntary deposit
Refusal of an insolvent estate
Refusal of succession is the possibility for an heir to refuse the succession, i.e. to accept or refuse to inherit the property of the deceased.
For companies
Commercial bankruptcy is a procedure established by law to allow companies in financial difficulty to restructure and continue their activities.