Notice of intent: An effective tool that can save your business in 48 hours

By the BRESSE Syndics team | Updated: May 2026 | Reading time: 6 min | Notice of Intent (LFI), Section 50.4, suspension of corporate proceedings, Quebec insolvency emergency, emergency trustee

Your bank called this morning to inform you that it requires repayment of your line of credit in 10 days. Revenu Québec has filed a third-party seizure on your main customer account. A key supplier threatens to stop deliveries. Your business is still going strong – but another 48 hours and it’ll collapse.

There is a legal tool that can, as of today, immediately suspend all these actions and give you up to six months to breathe and restructure: the notice of intention to file a proposal, provided for in section 50.4 of the Bankruptcy and Insolvency Act (BIA). It’s one of the most powerful – and least known – tools in Canadian insolvency law.

What is a notice of intent to file a proposal?

The notice of intention is a legal document filed by a licensed insolvency trustee with the Office of the Superintendent of Bankruptcy (OSB). It immediately triggers two decisive legal effects:

■ An automatic suspension of all collection procedures against the company – seizures, lawsuits, third-party seizures, demands for payment from Revenu Québec and the CRA, executions of bank guarantees.

■ An initial period of 30 days, extendable to a maximum of 6 months, to prepare and file a formal proposal.

Immediate effect: In urgent cases, a notice of intention can be filed within 24 to 48 hours. As soon as it is filed, your creditors – including governments – are legally bound to cease their actions. The phone stops ringing. Foreclosures stop. You catch your breath.

Article 50.4 BIA: what the law says about notices of intent

Section 50.4 of the Bankruptcy and Insolvency Act provides that an insolvent person – including a company – may file a notice of intention with the Official Receiver. This filing automatically triggers the stay of proceedings provided for in section 69 of the BIA. This legal protection is enforceable against all parties, including governments and secured creditors.

When is a notice of intent the right strategy?

Situation 1 – Imminent seizure or freeze by Revenu Québec or CRA

When Revenu Québec or the CRA sends a notice of seizure on your bank account or a third-party seizure to your customers, the notice of intent filed before the execution suspends the measure. Filed afterwards, it prevents the measure from continuing.

Situation 2 – Requirement for repayment by your financial institution

When your bank demands repayment of your margin or commercial loan, the notice of intent suspends this demand and prevents the execution of collateral while you negotiate.

Situation 3 – Multiple lawsuits from creditors threatening continuity

When several suppliers or creditors simultaneously file lawsuits or bankruptcy petitions, the notice of intent brings everything under a single legal umbrella and stops the bleeding.

Situation 4 – Time needed to structure a concordat proposal

A quality composition proposal – one that will be accepted by creditors – requires several weeks of preparation. The notice of intent provides this time, under legal protection.

Notice of intent vs. proposal: what’s the difference?

Notice of Intent and Composition Proposal

Comparison of the two mechanisms provided for in the Bankruptcy and Insolvency Act.

Objective

Notice of Intent (Sec. 50.4): Saving Time in an Emergency.

Concordat Proposal (Art. 50): Restructure debts in a sustainable manner.

Submission Deadline

Notice of Intent (Section 50.4): 24 to 48 hours.

Concordat proposal (Art. 50): Several weeks.

Suspension of Proceedings

Notice of Intent (Sec. 50.4): Immediate.

Concordat proposal (Art. 50): Immediate.

Term of Protection

Notice of Intent (Sec. 50.4): 30 days, extendable up to 6 months.

Concordat Proposal (Art. 50): Term of the agreement: up to 60 months.

Creditors’ Vote

Notice of Intent (Section 50.4): Not required at this stage.

Concordat Proposal (Art. 50): Required for court approval.

Next Step

Notice of Intent (Sec. 50.4): Filing of a composition proposal.

Concordat Proposal (Art. 50): Implementation of the Proposal.

In practice, the notice of intention is almost always the prelude to a proposal. It buys you the time you need to structure a solid offer to your creditors.

The company’s obligations after filing the notice of intent

Filing a notice of intent is not a blank check. The company must comply with several strict obligations during the protection period:

■ Pay post-deposit obligations (new suppliers, new wages, new DAS, new GST/QST) on time.

■ Provide the trustee with a detailed cash flow projection for the protection period within 10 days.

■ Submit a formal proposal within the allotted time (30 days, extendable).

■ Cooperate fully with the syndic and provide all requested documents.

Consequence of default: If the company fails to meet these obligations, it is deemed to have made an assignment of its assets – in other words, the notice of intention is automatically transformed into a commercial bankruptcy. Hence the importance of being accompanied by an experienced trustee.

How much does a notice of intent cost in Quebec?

The initial consultation with BRESSE is free and confidential. Fees for filing a notice of intent and preparing a proposal are structured according to the complexity of the case, and are paid out of the company’s assets or the amounts paid in the proposal. All fees are governed by the BIA and subject to court taxation.

Compared to the cost of a foreclosure that paralyzes operations, or a commercial bankruptcy that destroys the company’s value, the cost of a well-executed notice of intent is almost always far outweighed by the value preserved.

Is your company in an emergency situation? Consult a trustee in Quebec City today

In urgent cases, BRESSE can often meet with an executive within 24 hours and file a notice of intent within 48 hours. Free, confidential, no-obligation initial consultation.

Business emergency – Call now: 1 844 890-6767 | bresse.com

BRESSE Syndics – Licensed Insolvency Trustees – Greater Quebec City Area – 40 years of experience working with business leaders

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