Best Restructuring & Insolvency Lawyers in Ontario

1. About Restructuring & Insolvency Law in Ontario, United States

Ontario is a province in Canada, not the United States. This guide explains Restructuring and Insolvency law as it applies in Ontario, Canada. The core regimes are federal statutes administered across Canada and in Ontario courts, with oversight by the Office of the Superintendent of Bankruptcy (OSB).

The two main federal statutes are the Bankruptcy and Insolvency Act (BIA) and the Companies' Creditors Arrangement Act (CCAA). The BIA covers consumer insolvency, personal bankruptcy, and corporate restructurings for smaller enterprises. The CCAA principally governs restructurings for large, Canada-wide corporations with substantial creditor interests.

Ontario courts, including the Ontario Superior Court of Justice, supervise these proceedings when court protection or approval is required. A Licensed Insolvency Trustee (LIT) plays a central role in many insolvency processes by administering filings, proposing plans, and collecting assets for creditors.

“The Bankruptcy and Insolvency Act provides the framework for consumer proposals, personal bankruptcies, and corporate reorganizations in Canada.”

“The Companies' Creditors Arrangement Act enables court supervised restructurings for large corporations with complex creditor landscapes.”

For authoritative guidance, consult the Office of the Superintendent of Bankruptcy Canada and the primary statutes directly.

Official resources: - Office of the Superintendent of Bankruptcy Canada: osb.gc.ca - Bankruptcy and Insolvency Act (BIA): laws-lois.justice.gc.ca - Companies' Creditors Arrangement Act (CCAA): laws-lois.justice.gc.ca - Ontario Superior Court of Justice (Commercial List and insolvency matters): ontariocourts.ca/scj

2. Why You May Need a Lawyer

Restructuring and insolvency matters require careful navigation of complex rules and creditor rights. A lawyer or solicitor with expertise in restructuring and insolvency can help you evaluate options and prepare a realistic plan.

• Small family business facing supplier arrears - A Ontario bakery with $1.2 million in debt seeks protection under the BIA to stop creditor enforcement and negotiate a repayment plan with lenders.
• Personal debt spiral - An Ontario resident with multiple unsecured debts considers a consumer proposal or personal bankruptcy to regain financial stability.
• Large corporate restructuring - A manufacturing company with operations across Canada and the United States contemplates a CCAA filing to renegotiate debts while continuing operations.
• Cross-border supplier disruptions - A Canadian subsidiary needs DIP financing and court protection to restructure while maintaining contracts with suppliers and customers in multiple jurisdictions.
• Asset protection and fiduciary duties - An executive facing potential wage garnishments and asset risk seeks guidance on how insolvency filings affect personal and corporate assets.
• Creditor negotiation strategy - A construction firm wants a negotiated settlement with secured creditors and insurers, backed by a formal restructuring plan.

3. Local Laws Overview

The Ontario insolvency framework relies on federal statutes administered nationally, with Ontario courts handling proceedings locally. The key laws are:

• Bankruptcy and Insolvency Act (BIA) - Governs consumer insolvency, personal bankruptcies, and corporate restructurings for smaller entities. It provides mechanisms such as consumer proposals and the stay of proceedings during restructuring. Laws: BIA
• Companies' Creditors Arrangement Act (CCAA) - Applies to large corporations seeking a court supervised restructuring while protecting the company from creditors. It supports complex plans, negotiations, and debtor in possession financing. Laws: CCAA
• Ontario Superior Court of Justice - Commercial List - The designated court in Ontario for many insolvency and restructuring matters, including BIA and CCAA proceedings, with specialized procedures for commercial cases. Ontario Courts

Recent trends include increased use of court supervised restructurings in volatile markets and ongoing guidance for interim financing and creditor negotiations. Official sources reporting on these regimes provide detailed procedural steps and filing requirements.

4. Frequently Asked Questions

What is a consumer proposal and how does it work?

A consumer proposal is a formal arrangement with creditors under the BIA to repay a portion of the debt over time. It stops most collection actions and wage garnishments once accepted by creditors and approved by the court.

How do I file for bankruptcy in Ontario?

A filing generally begins with a consultation with a Licensed Insolvency Trustee who files the necessary documents with the OSB. The process leads to discharge after meeting requirements or completing a consumer proposal.

What is the difference between BIA and CCAA?

BIA handles personal insolvency and smaller corporate restructurings. CCAA is for larger corporations needing court supervised restructurings while seeking to avoid liquidation.

How long does insolvency typically take in Ontario?

Consumer proposals usually span 36 to 60 months, depending on terms. Corporate reorganizations under BIA or CCAA vary widely, from a few months to over a year.

Do I qualify for a consumer proposal?

Qualification depends on your total debt, income, and assets. A Licensed Insolvency Trustee can assess eligibility and advise on feasible proposal terms.

Can a company continue to operate during a CCAA process?

Yes, a company may continue operations under court protection while restructuring negotiations proceed, often with debtor in possession financing.

Should I hire a lawyer or a Licensed Insolvency Trustee?

In Canada, a LIT administers insolvency filings, while a solicitor provides legal strategy and represents you in court. Many clients use both.

What fees are involved in insolvency proceedings?

Fees include LIT administration charges and, if applicable, legal fees. Some costs may be offset by the restructuring plan or government relief programs.

Is there relief for student debt in insolvency?

Student loans may be discharged after a threshold period of non payment, but this is subject to specific criteria and court decisions.

Where do I start if I am worried about insolvency?

Start with a confidential consultation with a LIT or restructuring solicitor to review options, assess eligibility, and outline the next steps.

How much debt do I need to file for insolvency?

There is no fixed debt amount; eligibility depends on a combination of debt type, income, assets, and bargaining power with creditors.

What is a stay of proceedings and how long does it last?

A stay temporarily halts creditor actions during restructuring. The duration depends on the court order and the proposed plan, often several weeks to months.

What are the creditor rights during a restructuring?

Creditors retain certain rights, including oversight of the plan, voting on proposals, and rights to object to terms, with court supervision ensuring fairness.

5. Additional Resources

• Office of the Superintendent of Bankruptcy Canada (OSB) - Federal regulator for insolvency proceedings; provides consumer insolvency information, trustee search tools, and filing guidance. osb.gc.ca
• Bankruptcy and Insolvency Act (BIA) - Governs personal and small business insolvency; includes consumer proposals and bankruptcy processes. Laws: BIA
• Companies' Creditors Arrangement Act (CCAA) - Governs large corporate restructurings requiring court supervision. Laws: CCAA
• Ontario Superior Court of Justice - Ontario court handling insolvency proceedings, including the Commercial List for large matters. Ontario Courts

6. Next Steps

1. Schedule a consultation with a licensed insolvency professional or restructuring solicitor within 1-2 weeks to assess options.
2. Collect financial documents first, including debts, assets, income, and recent statements, within 1 week of the consultation.
3. Decide whether BIA or CCAA is appropriate based on debt level, creditor mix, and business goals; obtain initial guidance on feasibility.
4. Engage the necessary professionals: a Licensed Insolvency Trustee for filings and a solicitor for legal strategy; confirm roles and fees up front.
5. Prepare and file any required documents with the OSB; coordinate with creditors to negotiate stay terms and a plan.
6. Attend creditor meetings and court hearings as required; monitor the status of the plan and adjust as needed.
7. Develop and implement an exit plan post-restructuring, including long-term budgeting and creditor communications, within 6-12 months after filing.