What to do next
Get advice before you miss a remittance
The point at which options are widest is before default. Once payroll or GST/HST remittances are missed, director liability crystallises and leverage evaporates.
Choose the right instrument
A BIA proposal is faster and cheaper for smaller businesses; CCAA offers more flexibility for larger and more complex ones. An interim receivership or a going-concern sale may be better than either.
Protect directors deliberately
Trust amounts — payroll deductions, GST/HST — and certain employee entitlements carry personal liability. Prioritising them, and documenting the reasoning for every payment decision, is the practical defence.
Do not prefer creditors or move assets
Payments to selected creditors and transfers below value in the period before insolvency can be reversed and can expose directors. Every payment decision in this window should be advised on.
Frequently asked questions
Does filing stop creditors?
Yes. Both a proposal and CCAA proceedings create a stay that halts enforcement while a plan is developed, which is usually the immediate objective.
Can I keep operating?
That is the point of restructuring — continuing as a going concern while compromising debt. Viability of the underlying business is what determines whether it works.
Am I personally exposed?
For trust amounts and certain employee entitlements, yes. Continuing to incur debt while insolvent adds further risk.
Can I just pay the suppliers I need?
Be very careful. Preferential payments before insolvency can be reversed and can create personal liability. Get advice before choosing who to pay.
This is general information, not legal advice. Laws vary by location and every situation is different — speak with a qualified lawyer about your specific circumstances.