What are Bankruptcy Laws?

Bankruptcy and associated legal work

Bankruptcies have become common due to the unfavorable global business climate and also due to the mismanagement of finances by people. It is estimated that more than a million bankruptcy cases are filed in Canada itself. Canadian government has taken steps to help those who take the bankruptcy protection. It has legislated two major Bankruptcy laws to help people. They are Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act. The bankruptcy act protects the interest of all the stakeholders involved. It also lays down the duties of a bankruptcy trustee during the process. It also lays down the responsibilities of the official overseeing the legal motions. It also gives the bankrupt certain privileges and his responsibilities. The second act however deals with business organizations that file for the insolvency. It deals with the agreements worked out between the creditors and the company. It also gives power to the courts to intervene in the process.

Avenues for law students

Legal students who wish to pursue a profession as a lawyer can specialize in this type of cases and the laws governing them. The lawyer can either lobby for the creditors or can take sides with the bankrupt. Mostly the lawyer taking sides with the creditor has his task cut out. A lot of financial gain can be got from it. The lawyer on the debtor side may get fees for his services based on the financial health of the person. A lawyer specializing in bankruptcy laws has to concentrate more on paperwork. The job does not involve much courtroom lobbying. The lawyer must build up a good case for his defendant. The lawyer must be updated about new developments and legislations passed.

Provincial laws governing bankruptcy

Even though bankruptcy is dealt at the federal level, there are also provincial laws governing the legal proceedings. The debtor will usually be worried about the properties that will be auctioned to pay off the debts. The bankrupt might want to retain some properties and protect them from the creditors. The properties to sell off are usually decided by the bankruptcy trustee after consultations with the debtor and analyzing his total assets and financial health. The provincial bankruptcy laws mainly revolve around the powers given to the bankrupt to decide which properties he may retain. Almost all provinces have separate laws for their provinces to help out those who applied for bankruptcy.

Bankruptcy Trustees show the way

Bankruptcy laws are important pieces of legislation. The government must pass laws such that the interests of everyone involved are protected. The cases also need delicate handling. This leads to the need for a bankruptcy trustee. He oversees the whole legal process. He acts as a bridge between the two parties. The trustees also ensure that proper guidance and counseling is provided to all parties. There are licensed trustees who perform the duties. They however charge for the services rendered. They collect the fees from both the creditors and the debtor. They are main people who ensure the process completes smoothly and hassle free.