Subject to the provisions of the Bankruptcy and Insolvency
Act (BIA), one or more unsecured creditors of a debtor may
apply to the court for a bankruptcy order in respect of the debtor
if:
- The debt or debts owing to the creditor or creditors by the
debtor is $1,000 or more; and,
- If debtor has committed an act or bankruptcy in the six month
period prior to the filing of the application with the court.
Secured creditors are generally outside the distribution scheme
of the BIA. They are entitled to realize on the property of the
debtor charged by the security, and thus may have no interest in
the bankruptcy of the debtor.
However, in some instances, it may serve the purposes of the
secured creditor to have a bankruptcy, for example, to reorder
certain priorities between the secured creditor and other
creditors. In such case, a secured creditor may value the security
at $1,000 less than the amount the secured creditor is owed in
order to qualify as an
