In most cases, unless a bankrupt corporation pays all debts owed at the time of bankruptcy, the company ceases to exist. If you wish to dissolve an incorporated business or start a new one, you will have to contact the government body that governs the affairs of your corporation.
Bankruptcy lawyers can play a role in many areas of your bankruptcy. A good bankruptcy lawyer can help you work through the details, the alternatives to bankruptcy and help you understand how your choices will affect you.
Bankruptcy is a complex legal process. If you live in Canada and are considering bankruptcy we suggest you contact a Canadian Bankruptcy Trustee to fully review your situation. Licensed by the federal government, these Bankruptcy Trustees offer free initial consultations to answer any of your questions regarding bankruptcy or other financial options that may be available to you.
Bankruptcy and Employees
Employees are unsecured creditors in a bankruptcy proceeding. This means employees are at the bottom of the hierarchy.
In this way, as an unsecured creditor, even if an employee had a claim for wrongful dismissal following their termination from a bankrupt employer, they wouldn’t be able to, generally, recoup any damages because there is usually no money left to pay for such damages.
Indeed, employees are even barred from suing their bankrupt former employer for wrongful dismissal. Instead, employees who have claims for damages against their former employer under statute or common law, must file with the Trustee of the bankruptcy proof of their claim of an unsecured debt and hope they can receive some amount after the secured debtors are paid first.
We can help, when you face corporate bankruptcy in Kitchener/Waterloo:
Sole proprietor bankruptcy
Partnership bankruptcy
Incorporated business bankruptcy
Business contracts and agreements including loans
HST and payroll taxes
Employee wages
Business malpractice, alleged wrongdoing, and negligence of the business owners
CRA debt and transfer of assets
Declaring corporate dividends
If you are closer to Toronto, Hyde HR Law is an Ontario law firm that can help employers and employee groups (unions) navigate the complications of bankruptcy. Hyde’s employment and labour lawyers (Toronto-based) come from nationally recognized law firms and the firm itself was the Platinum Winner of the 2022 Toronto Star Readers’ Choice Awards.
Other Recommendable Bankruptcy Attorneys
Business Bankruptcy in Canada
