Litigation debt recovery update 2021

As you may know, due to the significant impact of COVID on the business community, temporary laws were introduced in March 2020 to attempt to help businesses and individuals stay afloat during that very difficult period.

In summary, at a high level, the following changes were made:

1. A creditor could not issue a statutory demand to a debtor company if the company did not owe the creditor at least $20,000.00 (which was increased from the usual $2,000.00 minimum);
2. A creditor could not issue a bankruptcy notice to an individual debtor unless the judgement amount owing to the creditor was $20,000.00 (increased from $5,000.00); and
3. The period for which the corporate debtor or individual debtor had to respond to the statutory demand or bankruptcy notice was increased from 21 days to 6 months.