12. Introduction to Bankruptcy
It is important that any individual or business who initiates bankruptcy proceedings always acts in good faith. The duty of good faith requires parties to a bankruptcy proceeding to act honestly, fairly, and in the best interests of all stakeholders. This means that all parties must provide full and accurate disclosure of all relevant information and must not take any actions that would take unfair advantage of other parties. Further, all parties must cooperate in good faith in order to reach a fair and equitable resolution to the bankruptcy. The duty of good faith applies to all parties involved, including creditors, debtors, trustees, and other stakeholders.
Bankruptcy is a privilege offered to all Canadians, who through various circumstances, often beyond their control, have found themselves with a debt load which they are unable to manage. Proceeding in a responsible, balanced and transparent manner, helps to ensure that the courts will absolve accumulated debts and allow the business or person to effectively start again.
Moreover, any debtor who takes any fraudulent actions, refuses or neglects to answer fully and truthfully all proper questions put to the bankrupt at any examination, or makes a false entry or knowingly makes a material omission in a statement or accounting can be found guilty of an offence and is liable, to a fine of up to five thousand dollars or up to one year in prison (or both), or on conviction on indictment, to a fine up to ten thousand dollars or up to three years in prison (or both).