Editing Debt restructuring (section)

=== Canada ===
Two common avenues for restructuring debt exist in Canada: a Division 1 Proposal and a CCAA filing. The former is available to both corporations and individuals who owe $250,000 or more to creditors.<ref>{{Cite web|last=Branch|first=Legislative Services|date=2019-11-01|title=Consolidated federal laws of canada, Bankruptcy and Insolvency Act|url=https://laws-lois.justice.gc.ca/eng/acts/B-3/page-20.html|access-date=2021-04-27|website=laws-lois.justice.gc.ca}}</ref> The latter is available only to larger companies owing more than $5 million to their creditors.

A Division 1 Proposal is a last resort. Created by the [[Bankruptcy and Insolvency Act]] of 1985, the option to file Division 1 is not an option to be taken lightly as, in the event that the stipulations within the proposal get voted down by creditors or not signed off by the court, one falls into bankruptcy.<ref>{{Cite web|last=Branch|first=Legislative Services|date=2019-11-01|title=Consolidated federal laws of canada, Bankruptcy and Insolvency Act|url=https://laws-lois.justice.gc.ca/eng/acts/B-3/page-20.html|access-date=2021-04-27|website=laws-lois.justice.gc.ca}}</ref> Division 1 proposals allow companies to be briefly relieved of lawsuits by creditors, as well as they allow companies to stop paying money to their unsecured creditors while the proposal is being reviewed. A Division 1 Proposal to restructure debts must secure 66% of the creditors' votes set in proportion to how much they are owed, and 50% plus one of all creditors votes in terms of number of creditors. On top of such democratic approval, the court itself has to approve how the debts get restructured. Withstanding all such approval, a business or individual can continue operating as normal; otherwise, a business or individual is obliged to proceed into bankruptcy filing.<ref>{{Cite web|last=Government of Canada|first=Innovation|date=2004-02-19|title=You Owe Money — Division I Proposals|url=https://www.ic.gc.ca/eic/site/bsf-osb.nsf/eng/br02052.html|access-date=2021-04-27|website=www.ic.gc.ca}}</ref>

CCAA filings were created by the [[Companies' Creditors Arrangement Act]], a piece of legislation first put forward and passed in 1933 and updated later in 1985.<ref>{{Cite web|last=Branch|first=Legislative Services|date=2019-11-01|title=Consolidated federal laws of canada, Companies' Creditors Arrangement Act|url=https://laws-lois.justice.gc.ca/eng/acts/C-36/index.html|access-date=2021-04-27|website=laws-lois.justice.gc.ca}}</ref> A CCAA filing allows a Canadian company to have a window in time (typically between 30 and 90 days) in which they can renegotiate and reorganize their debt payment plans with creditors. During this brief period, creditors cannot seize any money that is owed to them. These windows of time may be renewed multiple times over. Once a CCAA application gets finally rejected, the company in question can be forced into [[receivership]] or [[bankruptcy]]. This could happen for a number of reasons, chief among them being a failure to come to an agreement with creditors as to how to restructure the debt.<ref>{{Cite news|title=When a Company Tries to Reorganize|work=Canadian Broadcasting Channel|url=https://www.cbc.ca/news/business/when-a-company-tries-to-reorganize-1.790181}}</ref>