Company FAQs

As soon as your business experiences persistent financial difficulties (late payments, mounting debts, exhausted lines of credit, overdue taxes), it's advisable to consult a licensed insolvency trustee. An early diagnosis will enable you to consider viable solutions for preserving your business or managing closure in an orderly fashion.

These are the two main formal insolvency procedures for companies, but they lead to very different outcomes.

A proposal is a negotiated agreement between your company and its creditors, administered by a licensed insolvency trustee. It allows your company to continue its operations while restructuring its debts according to your actual financial capacity. As soon as the proposal (or notice of intent) is filed, an automatic stay of proceedings comes into effect: creditors can no longer sue you, seize your assets or terminate your contracts. It's a lifeline that gives you time to breathe and turn things around.

Commercial bankruptcy, on the other hand, leads to the cessation of the company's activities and the orderly liquidation of its assets by the trustee. The sums recovered are distributed to creditors according to an order of priority established by law. This is sometimes the most appropriate solution when there is no longer any realistic viability for the business.

At BRESSE, we analyze both scenarios with you and recommend the one that best protects your interests - and those of the people who depend on your company.

The fate of your employees is often the first concern of entrepreneurs in financial crisis, and that's a credit to your sense of responsibility.

The law provides important protections for employees. In a commercial bankruptcy, unpaid wages, vacation pay and compensation in lieu of notice are among the priority claims - they are reimbursed before most other creditors from the sums recovered in the liquidation of assets.

In addition, the federal government's Wage Earner Protection Program (WEPP) can cover certain amounts owed to employees when an employer is insolvent - including wages, vacation pay and severance pay, up to a certain ceiling.

Under a proposal, if the business continues to operate, employees retain their jobs and are paid as normal. Our team at BRESSE can guide you through your obligations to your employees every step of the way, and help you communicate with them in an appropriate and respectful manner.

If you have personally guaranteed certain company debts (e.g. lines of credit, leases, loans), you could be held liable even after the company has gone bankrupt. The trustee will help you analyze your personal commitments and recommend the best solution, taking into account the interests of the company and its directors.

The first consultation is free of charge. It enables you to understand your situation, your options and the possible steps you can take, without any obligation. Thereafter, if formal steps are taken, fees are regulated by law and vary according to the case.

Administrators may be held liable for certain unfulfilled obligations (e.g., source deductions, taxes, salaries). A meeting with a trustee can help you assess the risks and guide you toward the right course of action.

Many entrepreneurs wait too long before seeking advice - often for fear of what it will mean. But the sooner you act, the more viable your options.

Here are the warning signs you shouldn't ignore: you're no longer able to remit source deductions, GST or QST to governments; your line of credit is constantly maxed out; you're using your personal credit card to cover business expenses; your suppliers are demanding payment on delivery because your lead times are getting longer; one or more creditors have sent you a formal notice or are threatening legal action; your cash flow has been negative for several consecutive months.

A situation that still seems manageable can quickly turn upside down. At BRESSE, the first consultation is free and confidential. We'll give you an honest picture of the situation - without judgment, without pressure - and present you with all available avenues, including those that keep your business running.