Bankruptcy Step 5: You attend a meeting of creditors

• Introduction to bankruptcy in Canada
• Step 1 - Contact a trustee in bankruptcy
• Step 2 - Complete bankruptcy forms
• Step 3 - Trustee sells your assets
• Step 4 - Trustee notifies your creditors
• Step 5 - Creditors meetings if required...
• Step 6 - Examination by an officer of the OSB if required...
• Step 7 - You are required to attend two counselling sessions
• Step 8 - Trustee prepares your report to the OSB
• Step 9 - You attend a discharge hearing if required...
• Step 10 - You are discharged from bankruptcy
• The student loans hardship provision

You attend a meeting of creditors

Step 5: You attend a meeting of creditors, if one is called.

The purpose of the creditors meeting is to

• allow creditors to obtain information about the bankruptcy;
• confirm the appointment of the trustee;
• appoint up to five inspectors to supervise the administration of your estate; and
• allow creditors to give directions to the trustee.

At the meeting, creditors may ask questions regarding the bankrupt's assets and liabilities. They can also review the trustee's preliminary report and can instruct the trustee on the administration of the estate.

Purpose of the inspectors at the creditors meetings

Inspectors are individuals who are usually appointed at the first meeting of the creditors to perform functions described below. No inspector may be appointed if he is a party to any contested action or proceeding against the estate. No inspector is usually appointed under summary administration procedure, where the value of debtor’s property is under $10,000.

The trustee is required to obtain the permission inspectors before carrying out many of trustee’s responsibilities, such as the sale of property of the estate, the institution or defending of actions relating to the property of the bankrupt, settling any debts owing to the bankrupt and exercising trustee’s discretion in retaining and assigning bankrupt’s contracts. The inspectors must give their approval to the final statement of receipts and disbursements and trustee’s fees.

Inspectors have fiduciary duty to the creditors and should be impartial though acting in creditor’s interest. The should supervise trustee’s compliance with the procedures under the BIA and the Directives and may apply for the removal of the trustee