Best Restructuring & Insolvency Lawyers in Montreal

About Restructuring & Insolvency Law in Montreal, Canada

Restructuring and insolvency law in Montreal, Canada addresses the legal processes and protections available for individuals and businesses facing financial distress or insolvency. Whether you are a business owner struggling with debt or an individual overwhelmed by financial obligations, these laws offer structured solutions to resolve insolvency and provide ways to reorganize debts. In Montreal, the legal framework is primarily governed by federal statutes, with certain elements influenced by provincial regulations and local practices. The aim is to balance the interests of debtors, creditors, employees, and other stakeholders while ensuring fair and orderly debt resolution or restructuring.

Why You May Need a Lawyer

Restructuring and insolvency matters can be complex and stressful. Consulting a lawyer may be necessary in a range of situations, including:

• You are a business owner unable to pay debts as they become due and are considering restructuring or filing for bankruptcy.
• You are an individual overwhelmed by personal debt, considering options such as bankruptcy or consumer proposals.
• You are a creditor seeking to recover outstanding amounts owed by an insolvent entity or individual.
• You need counsel on negotiating with creditors or evaluating repayment plans.
• You want to protect your assets from seizure or ensure continued operation of your business during financial difficulties.
• You face threats of creditor actions, such as garnishment or asset liquidation.
• You wish to explore alternatives to bankruptcy that may allow you to restructure your affairs.

A lawyer can explain your rights and obligations, guide you through available legal tools, and help develop a strategy best suited to your unique situation.

Local Laws Overview

Montreal, like the rest of Canada, observes both federal and provincial laws concerning restructuring and insolvency.

• Bankruptcy and Insolvency Act (BIA): The primary federal statute governing personal and commercial bankruptcy, consumer proposals, and creditor arrangements.
• Companies’ Creditors Arrangement Act (CCAA): Applicable mainly to larger corporations seeking to restructure debts exceeding five million Canadian dollars.
• Quebec Civil Law: Provincial regulations may impact insolvency matters, such as creditor priority, types of exempt assets, and contracts.
• Consumer Proposals: An alternative to bankruptcy, it allows individuals to negotiate extended repayment terms with creditors under the supervision of a Licensed Insolvency Trustee.
• Commercial Restructuring: Businesses may pursue court-approved arrangements to restructure operations, debts, or assets, preserving value and potentially allowing continued operation.

Local courts, including the Superior Court of Quebec, play a significant role in overseeing and approving insolvency and restructuring matters in Montreal.

Frequently Asked Questions

What is the difference between bankruptcy and insolvency?

Insolvency refers to a financial state where a person or business cannot pay debts as they come due. Bankruptcy is a legal process that deals with insolvency by distributing assets to creditors and discharging remaining debts.

What is a consumer proposal?

A consumer proposal is a legally binding process where individuals, under the guidance of a Licensed Insolvency Trustee, negotiate with creditors to repay a portion of debts over a set period, often as an alternative to bankruptcy.

Who can file for bankruptcy in Montreal?

Any individual, partnership, or corporation residing, doing business, or owning property in Canada who owes at least one thousand Canadian dollars and is insolvent can file for bankruptcy under the Bankruptcy and Insolvency Act.

How long does bankruptcy last in Montreal?

For a first-time bankrupt individual, the process usually lasts nine months, but it can be extended to twenty-one months if you have surplus income or for repeat bankruptcies. Certain conditions can also affect the length.

What assets can I keep if I file for bankruptcy in Quebec?

In Quebec, certain assets are exempt from seizure, such as necessary clothing, some household furniture, work tools, retirement savings (with specific restrictions), and occasionally a vehicle up to a certain value.

Can businesses avoid bankruptcy through restructuring?

Yes, businesses can pursue restructuring under the Companies’ Creditors Arrangement Act or through proposals under the Bankruptcy and Insolvency Act, both of which can offer alternatives to liquidation and allow continued operations.

Will bankruptcy affect my credit score?

Yes, bankruptcy will have a significant negative impact on your credit score and remain on your credit report for at least six years after discharge for a first bankruptcy.

What is a Licensed Insolvency Trustee?

A Licensed Insolvency Trustee (LIT) is a federally regulated professional who administers bankruptcy and proposal processes, provides financial advice, and ensures compliance with legal requirements.

Can creditors take my home if I file for bankruptcy?

In Quebec, this depends on the value of your home, your equity, and whether you can make arrangements with your mortgage lender and other secured creditors. Not all homes are automatically seized, and trustees can advise on your options.

How do I start the bankruptcy or proposal process?

You must meet with a Licensed Insolvency Trustee, who will assess your financial situation, explain your options, help you complete required forms, and file necessary documents with the Office of the Superintendent of Bankruptcy Canada.

Additional Resources

• Office of the Superintendent of Bankruptcy Canada: Offers information and oversight for bankruptcy and insolvency matters across Canada.
• Licensed Insolvency Trustees (LITs): Qualified professionals certified by the federal government to manage insolvency and restructuring proceedings.
• SOS Dettes (Quebec Debt Help Organizations): Provides counseling and assistance on managing debt and credit issues in Quebec.
• Quebec Ministry of Justice: Includes resources on debt recovery and the court process in Quebec.
• Canadian Association of Insolvency and Restructuring Professionals (CAIRP): Database of certified insolvency professionals.
• Community Legal Clinics: Provide free or low-cost legal advice for those facing financial hardship.

Next Steps

If you believe that you or your business may need restructuring or insolvency assistance, taking prompt action can make a significant difference in the options available to you. Consider the following steps:

• Gather all relevant financial documents, including debts, assets, income, and expenses.
• Schedule a consultation with a Licensed Insolvency Trustee or a lawyer experienced in restructuring and insolvency law.
• Prepare a list of questions to ask during your consultation, including concerns about assets, debts, and possible outcomes.
• Explore alternatives to bankruptcy, such as proposals or informal restructuring agreements, especially if you wish to preserve credit or continue business operations.
• Follow through on legal advice promptly, as delaying action may limit your options and worsen your financial situation.
• Utilize additional support services, including financial counseling and community organizations, for guidance and resources throughout the process.

Seeking timely legal guidance is crucial. Each situation is unique, and a qualified professional can provide advice tailored to your circumstances, help you navigate legal requirements, and support you toward the best possible resolution.