Stay of Proceedings

Once you file for bankruptcy or a consumer proposal a stay is ordered by the court.  A stay of proceedings is judge’s court order that:

• stops garnishee of wages
• stops all legal actions (law suits) from creditors
• prohibits creditors from contacting you

The stay of proceedings stops all actions against the debtor, wage garnishees are stopped and all legal proceedings.

Only a Licensed Insolvency Trustee has the authority apply for a stay of proceedings on your behalf.

Once the bankruptcy trustee has filed the application a stay is automatically granted, meaning all actions for unsecured debts are stopped.

Your trustee then;

• advises the court, and
• advises any creditors

That you have filed for a consumer proposal or bankruptcy and they must stop all actions against you.

Creditors are not allowed to contact you and must speak through the trustee. It is the trustee’s job to speak and deal with creditors.

The creditor protection under an automatic stay of proceedings remains in place throughout the bankruptcy, except where a creditor makes an application to have the stay withdrawn by the court.

When the bankruptcy is discharged or the proposal is completed and your debts are cleared the stay ends.

★★★★★ Although it was the last thing we wanted to do, YanchDey made this process very smooth, they did all the paperwork and dealt with our creditors.  The garnishee was stopped and we can sleep at night, we now have a fresh start. Many thanks, Debbie S. Ajax

Where you have unpaid taxes or owe money to the Canada Revenue Agency (CRA) the stay stops proceedings against you.

The stay does not reverse any actions that have previously happened e.g. liens placed on property.

The trustee will advice the CRA that you have filed for bankruptcy or are in consumer proposal, just like other creditors they are required to stop any actions against you.