Bankruptcy and Insolvency Act

Marginal note:Certain rights limited

• 66.34 (1) If a consumer proposal has been filed in respect of a consumer debtor, no person may terminate or amend any agreement, including a security agreement, with the consumer debtor, or claim an accelerated payment, or the forfeiture of the term, under any agreement, including a security agreement, with the consumer debtor, by reason only that

  • (a) the consumer debtor is insolvent, or

  • (b) a consumer proposal has been filed in respect of the consumer debtor

  until the consumer proposal has been withdrawn, refused by the creditors or the court, annulled or deemed annulled.

• Marginal note:Idem

  (2) Where the agreement referred to in subsection (1) is a lease, subsection (1) shall be read as including the following paragraph:

  • “(c) the consumer debtor has not paid rent in respect of a period preceding the filing of the consumer proposal.”

• Marginal note:Idem

  (3) Where a consumer proposal has been filed in respect of a consumer debtor, no public utility may discontinue service to that consumer debtor by reason only that

  • (a) the consumer debtor is insolvent,

  • (b) a consumer proposal has been filed in respect of the consumer debtor, or

  • (c) the consumer debtor has not paid for services rendered, or material provided, before the filing of the consumer proposal

  until the consumer proposal has been withdrawn, refused by the creditors or the court, annulled or deemed annulled.

• Marginal note:Certain acts not prevented

  (4) Nothing in subsections (1) to (3) shall be construed

  • (a) as prohibiting a person from requiring payments to be made in cash for goods, services, use of leased property or other valuable consideration provided after the filing of the consumer proposal; or

  • (b) as requiring the further advance of money or credit.

• Marginal note:Provisions of section override agreement

  (5) Any provision in an agreement that has the effect of providing for, or permitting, anything that, in substance, is contrary to subsections (1) to (3) is of no force or effect.

• Marginal note:Powers of court

  (6) The court may, on application by a party to an agreement or by a public utility, declare that this section does not apply, or applies only to the extent declared by the court, where the applicant satisfies the court that the operation of this section would likely cause it significant financial hardship.

• Marginal note:Eligible financial contracts

  (7) Subsection (1) does not apply in respect of an eligible financial contract.

• Marginal note:Permitted actions

  (8) Despite section 69.2, the following actions are permitted in respect of an eligible financial contract that is entered into before the filing of a consumer proposal and is terminated on or after that filing, but only in accordance with the provisions of that contract:

  • (a) the netting or setting off or compensation of obligations between the consumer debtor and the other parties to the eligible financial contract; and

  • (b) any dealing with financial collateral including

    • (i) the sale or foreclosure or, in the Province of Quebec, the surrender of financial collateral, and

    • (ii) the setting off or compensation of financial collateral or the application of the proceeds or value of financial collateral.

• Marginal note:Net termination values

  (9) If net termination values determined in accordance with an eligible financial contract referred to in subsection (8) are owed by the consumer debtor to another party to the eligible financial contract, that other party is deemed, for the purposes of subsection 69.2(1), to be a creditor of the consumer debtor with a claim provable in bankruptcy in respect of those net termination values.