519-646-2222Joint corporate and personal bankruptcies
The definition of a person in the Bankruptcy & Insolvency Act includes a “a corporation” and the Act contemplates the filing of joint files for both bankruptcies and proposals. So, there is no reason why a joint corporate and personal bankruptcy, or proposal, cannot be filed.
There may be issues with joint files, imposed by the facts of the circumstances of the insolvency. For example, some debts may not be jointly held by the two parties or their income streams and/or assets may be quite dissimilar. Nonetheless, joint files between corporations and individuals are permissible.
The courts have ruled in several cases that joint corporate proposals and bankruptcies may be filed and in some cases the courts have consolidated proceedings for ease of administration precisely because of the relationship between the parties.
The question then becomes if or not it makes commercial sense to file a proceeding that is joint between an individual and a corporation. There are many reasons, some of which are noted above, that it may not be practical to do so.
A corporation may not file a consumer proposal or a summary bankruptcy proceeding since the Act itself does not permit such filings. Mot of the time it is probably not practical or commercially reasonable to file such a proceeding but it is good to know that it is possible and is another possible resolution to hard to fix debt problems.