What is the Bankruptcy and Insolvency Act and how does it apply here?

The Bankruptcy and Insolvency Act is Canada’s federal law that governs bankruptcies and proposals. It pauses most collections, appoints a Licensed Insolvency Trustee, and sets rules for voting and court approval. In this case, it frames the Denis Coderre bankruptcy process and the upcoming proposal that may restructure unsecured debts and timelines.

What is a creditor proposal in Canada?

A creditor proposal Canada is a binding offer to unsecured creditors that can reduce balances and stretch payments. If creditors accept and a court approves, it replaces individual collection efforts. It aims to deliver better recoveries than bankruptcy while allowing the debtor to maintain employment, income stability, and certain assets.

How are Canada Revenue Agency tax arrears treated in proposals?

Canada Revenue Agency tax arrears can be included in a consumer proposal. The debtor offers terms that address principal and may seek relief on penalties or interest. CRA evaluates affordability and compliance going forward. If the proposal is approved, it binds CRA alongside other unsecured creditors under the same plan.

What happens if creditors reject the proposal?

If creditors reject the proposal, the file may convert to a bankruptcy or the debtor could revise and resubmit an offer. A conversion typically leads to asset realization based on exemptions and priorities, with unsecured creditors sharing net proceeds. The path chosen depends on affordability, creditor positions, and trustee guidance.

Law and Government

January 14: Denis Coderre Bankruptcy — C$1.1M Debt, Creditor Proposal

ByDanny Kontos January 14, 2026January 14, 2026

Denis Coderre bankruptcy is now formal. On January 14, the former Montreal mayor sought protection under the Bankruptcy and Insolvency Act with about C$1.1 million in liabilities. Listed debts include Canada Revenue Agency tax arrears, a mortgage lender, and a Scotiabank Visa balance. A January 26 creditor proposal will outline repayment terms. We explain what this filing signals for creditor recoveries, how proposals work in Canada, and what retail investors should watch in a changing consumer credit landscape.