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2014-02-23 21:39:20

Victoria Bankruptcy.ca Commonly Used Terms and Acronyms

When looking into bankruptcy the financial terms and acronyms created by high powered legal teams can make your head spin. You will find in this section of Victoria Bankruptcy.ca a list of commonly used terms and their definitions. If you have a bankruptcy term that is not answered here, please feel free to contact us for an explaination.

Bankruptcy and Insolvency Act - An Act Respecting Bankruptcy and Insolvency" that sets out the law on bankruptcy in Canada, and applies to both businesses and individuals. The legislation includes the duties and powers of the Office of the Superintendent of Bankruptcy, a federal agency responsible for ensuring that bankruptcies are administered in a fair and orderly manner.

Bankruptcy - This option can be taken when you are not in a position to repay a reasonable portion of your debt. The process relieves you of most debts, and legal proceedings by creditors generally stop.

BIA - Bankruptcy and Insolvency Act ("the BIA")

Bill C-12 - A comprehensive insolvency reform package by Parliament to modernize the Bankruptcy and Insolvency Act ("the BIA") and related acts.

Borrower - individual or institution receiving funds in the form of a loan and obligated to repay the loan, usually with interest

Canada Revenue Agency Debt - All debt owed to the Canadian Governments Revenue Agency

Chartered Insolvency and Restructuring Professionals - Chartered Insolvency and Restructuring Professionals (CIRP) are licensed as Trustees in Bankruptcy by the Superintendent of Bankruptcy have statutory duties, responsibilities and powers.

CIRP - Chartered Insolvency and Restructuring Professionals. CIRP's are licensed as Trustees in Bankruptcy by the Superintendent of Bankruptcy have statutory duties, responsibilities and powers.

Consolidation Order - Debt repayment that direct the amount and times when payments are due to the court. Payments are then distributed to your creditors. The interest rate is lowered to a rate set by the court

Consumer Debt - Is consumer credit which is outstanding. It is debt which is used to fund consumption rather than investment.

Consumer Proposal - In Canada, a person can file a consumer proposal as an alternative to bankruptcy. A consumer proposal is a negotiated settlement between a debtor and their creditors. A typical proposal would involve a debtor making monthly payments for a maximum of five years, with the funds distributed to their creditors.

Credit Counsellor - Offer to educate consumers about how to avoid incurring debts that cannot be repaid. This process is actually more debt counseling than a function of credit education.

Credit Rating - An estimate of the credit worthiness of an individual, corporation, or even a country. It is an evaluation made by credit bureaus of a borrower’s overall credit history. Credit ratings are calculated from financial history and current assets and liabilities.

Credit Report - Information gathered by credit agencies directly from your credit grantor, which is based solely on that grantor's experience with you. The credit report is compiled by the agency and is made available to the "members" of the credit granting agency, or to you, the debtor.

Credit Reporting Agencies - The two largest in Canada are Equifax and TransUnion. These agencies are a repository of consumer credit information.

Credit Score - A numerical expression based on a statistical analysis of a person's credit files, to represent the creditworthiness of that person. A credit score is primarily based on credit report information, typically sourced from credit bureaus.

Creditor - An entity that has a claim to the services of a second party. It is a person or institution to whom money is owed.

Debt Collection Agency - A business that secures the repayment of debts for third parties on a commission or fee basis.

Debt Consolidation Loans - Banks or financial institutions may "consolidate" your debts into one load. The lender pays off all of your debts to the different creditors and in return you make monthly payments to the lender.

Debtor - An entity that owes a debt to someone else. The entity may be an individual, a firm, a government, a company or other legal person

Equifax - A credit reporting agency in Canada that is a repository of consumer credit information. They do not make any credit decisions, rate consumers, or grant credit.

Grantor - A person who grants another person or entity (an agent) the authority and power to act on behalf of the grantor in accordance with the powers set forth in a power of attorney document.

Informal Arrangements with Creditors / Credit Counselling - Negotiate terms with your creditors with the assistance of a CIRP / Trustee or a Credit Counsellor. This option usually calls for the repayment in full of all your debts at a reduced interest rate.

Lender - A private, public or institutional entity which makes funds available to others to borrow.

Orderly Payment of Debts - Is a Consolidation Order setting out the amount and times when payments are due to the court. Payments are then distributed to your creditors. The interest rate is lowered to a rate set by the court.

OSB - Office of the Superintendent of Bankruptcy

Personal Budget - A finance plan that allocates future personal income towards expenses, savings and debt repayment. Past spending and personal debt are considered when creating a personal budget. There are several methods and tools available for creating, using and adjusting a personal budget.

Proposal - See Consumer Proposal

Superintendent of Bankruptcy - A federal agency responsible for ensuring that bankruptcies are administered in a fair and orderly manner.

The Act - See Bankruptcy and Insolvency Act

TransUnion - A credit reporting agency in Canada that is a repository of consumer credit information. They do not make any credit decisions, rate consumers, or grant credit.

Trustee - A legal professional who is appointed to hold legal title to the property of the debtor and to perform other duties required by the bankruptcy laws