An individual may become insolvent for a variety of reasons. For
many people, it may be a matter of over use of credit cards or
other credit facilities. For the individual who owns or operates a
business, if the business becomes insolvent, the individual may
also find himself or herself to also be insolvent. Regardless of
the reasons for insolvency, there are options available for
individuals under the Bankruptcy and Insolvency Act (the
"BIA").
An insolvent individual has some of the same options as an
insolvent corporation; he or she can file a notice of intention to
make a proposal, immediately make a proposal or assign into
bankruptcy. In addition, an individual who qualifies may make a
consumer proposal. Like a corporation, the insolvent individual may
also be forced into bankruptcy by a creditor initiating an
application for a bankruptcy order in respect of the
individual.
