Best Restructuring & Insolvency Lawyers in Québec

About Restructuring & Insolvency Law in Québec, Canada

Restructuring and insolvency law in Québec addresses the legal processes that help individuals and businesses facing financial distress manage their debts. The goal is to facilitate either the reorganization of financial affairs to allow continued operations or, if necessary, the fair distribution of assets among creditors. Québec, as a Canadian province, follows both federal insolvency statutes, such as the Bankruptcy and Insolvency Act (BIA) and Companies’ Creditors Arrangement Act (CCAA), as well as provincial civil law provisions that influence insolvency proceedings. These laws ensure that creditors' rights are protected while giving debtors an opportunity to make a fresh start or reestablish financial stability.

Why You May Need a Lawyer

If you or your business are facing overwhelming debt, dealing with creditor actions, or considering restructuring your financial obligations, you may need the expertise of a legal professional specialized in restructuring and insolvency. Here are some common situations where a lawyer can assist:

• Advising on the best debt relief or restructuring options available under Québec and Canadian law
• Filing for bankruptcy or consumer proposals
• Negotiating with creditors for settlements or payment arrangements
• Representing you in court proceedings related to insolvency
• Assisting with complex business restructuring under the CCAA
• Dealing with secured and unsecured creditor claims
• Protecting your assets and interests during insolvency processes
• Ensuring compliance with all reporting and disclosure obligations required by law

Local Laws Overview

Restructuring and insolvency matters in Québec are primarily governed by federal statutes, including the Bankruptcy and Insolvency Act (BIA) for individuals and small businesses, and the Companies' Creditors Arrangement Act (CCAA) for larger corporations needing to restructure debts. Québec’s Civil Code also plays a role, especially regarding the treatment of secured creditors and property rights.

Some key local aspects include:

• Québec follows unique rules for the ranking and treatment of secured creditors, influenced by the Civil Code
• Bankruptcies and proposals must be administered by a Licensed Insolvency Trustee (LIT) authorized in Québec
• Most insolvency proceedings are handled by the courts in Québec, often the Superior Court of Québec
• The laws provide for stays of proceedings, meaning that most collection actions stop once an insolvency process has started
• Certain property exemptions apply to individuals, allowing some assets to be protected from seizure

Frequently Asked Questions

What is the difference between bankruptcy and restructuring?

Bankruptcy is a legal process where an individual or business is declared unable to pay its debts, resulting in the liquidation of assets to pay creditors. Restructuring, on the other hand, involves reorganizing debts, often through formal proposals, to allow continued operations or payment under new terms.

Do I have to lose all my assets if I file for bankruptcy in Québec?

Not necessarily. Some assets, such as basic household furnishings and certain pensions, are exempt from seizure under Québec law. The specifics depend on your personal circumstances.

What is a Licensed Insolvency Trustee (LIT)?

An LIT is a professional licensed by the federal government to administer bankruptcies, proposals, and other insolvency proceedings in Canada, including Québec.

Can I keep my home if I go bankrupt in Québec?

It may be possible to keep your home, depending on the amount of equity and your ability to continue mortgage payments. This is a complex area, and a lawyer or LIT can provide case-specific advice.

What are the alternatives to bankruptcy for individuals?

Alternatives include consumer proposals, debt consolidation, or informal arrangements with creditors. Each option has different implications on your credit and finances.

What is the Companies’ Creditors Arrangement Act (CCAA)?

The CCAA is a federal law that allows large companies in financial difficulty to restructure their affairs, often by negotiating payment plans or settlements with creditors while maintaining business operations.

How does insolvency impact my credit in Québec?

Bankruptcies and proposals are recorded on your credit report and generally remain for six years or more, which can impact your ability to borrow in the future.

How are creditors prioritized in a bankruptcy or restructuring process?

There is a legal order for paying creditors, with secured creditors typically paid first, followed by preferred creditors, and finally unsecured creditors.

Can I declare bankruptcy for my business only, without involving my personal debts?

This depends on the structure of your business. Corporations are separate legal entities, but sole proprietors and certain partnerships may have personal liability for business debts.

What should I do if a creditor is threatening to seize my property?

Act quickly by consulting a lawyer or LIT. Once insolvency proceedings begin, there is usually a stay of proceedings that halts most creditor actions.

Additional Resources

• Office of the Superintendent of Bankruptcy Canada - Provides information and regulates insolvency proceedings in Canada
• Licensed Insolvency Trustees (LITs) in Québec - Professionals who can administer bankruptcies and proposals
• Éducaloi - A Québec organization that offers accessible legal information, including on debt and bankruptcy
• Justice Québec - Provincial government body with resources on civil justice and insolvency
• Local community legal clinics - May offer free or low-cost legal advice for those in financial need

Next Steps

If you are considering bankruptcy, restructuring, or if you are facing aggressive actions from creditors, it is crucial to consult with a qualified professional. Begin by gathering your financial records and making a list of your creditors and assets. Consider reaching out to a Licensed Insolvency Trustee for a free initial consultation. For more complex matters, especially those involving large debts or businesses, speak with a lawyer specializing in restructuring and insolvency in Québec. Acting early will give you the best chance to protect your rights and find a workable solution for your financial difficulties.