8:  Debtor and creditor relations

In a secured transaction, the promisor

Mortgages, pledges, and conditional sales are examples of

In a conditional sale

A chattel mortgage is

In a pledge or pawn

(PPSA)

The purpose of a PPSA is to protect creditors and innocent third parties. It does this by doing the following:

A security interest must go through the steps of

The first party to complete all three required steps will have priority even if a subsequent creditor is aware of the unperfected security interest of a prior creditor. The required steps are as follows:

The PPSA applies to the usual types of security interest, as well as consignments and leases intended as security interests. It also covers

In case of default by the debtor, a secured creditor has several recourses available under the PPSA:

In case of default by the debtor, a secured creditor has several recourses available under the PPSA:

Guarantees can be used to obtain

The federal Bank Act legislation was in effect prior to the provincial PPSAs being brought into force. The Act set up the right for banks to

In Canada, we have the federal Bankruptcy and Insolvency Act (BIA). It has a number of functions:

The BIA covers three categories of persons:

Three different procedures are available under the BIA:

A proposal is

Consumer proposals, also known as Division II proposals, may only be made by individuals whose debts

An assignment occurs when

If the creditors place the insolvent debtor into bankruptcy, they will do so by petitioning the court for a

two main purposes of the Bankruptcy and Insolvency Act:

The trustee has enormous powers and takes control of the debtor’s

The trustee has enormous powers and takes control of the debtor’s

A settlement is a

A settlement is a

A fraudulent preference is

A reviewable transaction is a

A reviewable transaction is a

Priority is given to

The preferred creditors are

The preferred creditors are

Once the claims of the preferred creditors are completely paid, the trustee will distribute the proceeds from the remaining assets on a

During the term of the bankruptcy proceedings and prior to discharge from bankruptcy, the bankrupt individual must co-operate with the trustee, and may not

Once the creditors have been paid, debtors may make application to the court to be

Personal property can be divided into two classes:

Negotiable instruments are a form of

A negotiable instrument is a

While a cheque is the most commonly used form of negotiable instrument, other types include

Unlike in the case of assignments, the person who has the negotiable instrument, known as a

If a negotiable instrument is marked “Consumer Purchase,” the normal laws relating to

With a cheque, the drawer is

A bill of exchange or draft also notifies a drawee to pay funds to the payee; however,

A promissory note is simply an