In our
last post, we discussed various acts that may be deemed as
offences under the Bankruptcy and Insolvency Act (BIA).
But in addition to these offences, other provisions in the BIA
authorize the attack and setting aside of improper transactions
entered into by the debtor prior to bankruptcy, without the
necessity of proving criminal charges.
The key question is whether the transaction resulted in the
debtor giving away more than they received. For example, if a
debtor, prior to bankruptcy, transferred their interest in their
home to their spouse, with little or no money being paid by the
spouse for the transfer, such a transaction would be ripe for
attack under the BIA.
Any transaction found to be improper can be unwound, with the
party who received the benefit of the transaction being required to
pay the amount of that benefit over to the trustee in
bankruptcy.
