Priority of Creditors in Canadian Business Law

A collection of vocabulary flashcards focused on key terms and definitions related to the priority of creditors and securing debt in Canadian business law.

Secured Creditor

A creditor who obtains a claim on a debtor’s property to secure payment.

Mortgage

A legal agreement where real property is used as security for a loan.

Pledge

An arrangement where the title is retained by the debtor, but possession is given to the lender.

Conditional Sales Agreement

A contract where the buyer takes possession of goods while the seller retains the title until full payment is made.

Chattel Mortgage

A loan secured by personal property that allows the debtor to retain possession.

Assignment of Book Accounts

Using accounts receivable as security for a debt, allowing the creditor to receive payment directly upon default.

Personal Property Security Act (PPSA)

Legislation that provides a unified approach for using personal property as security in Canada.

Security Agreement

A contract between a secured party and debtor that establishes a security interest in collateral.

Priority of Secured Creditors

The right of secured creditors to claim collateral ahead of other creditors based on registration and terms of the security.

Builder's Liens

Legal claims against real property by suppliers of goods and services until paid.

Fraudulent Transfers

Transferring an asset title to avoid creditor claims.

Bankruptcy and Insolvency Act

A federal statute that aims to rehabilitate debtor assets for creditor benefit and manage bankruptcy processes.

Voluntary Assignment in Bankruptcy

A process where the debtor voluntarily assigns their assets to a trustee for creditor benefit.

Trustee in Bankruptcy

An individual appointed to manage a bankrupt’s estate and distribute assets to creditors.

Discharge from Bankruptcy

The release of an individual from the obligation to pay certain debts after completing bankruptcy processes.

Alternatives to Bankruptcy

Strategies such as negotiation or proposals to manage debt without formal bankruptcy proceedings.