Fact debtor had access to equity in property not leading to conclusion she would be able to meet obligations

Ontario civil | Bankruptcy and Insolvency | Assignments in bankruptcy | Annulment of assignment

Creditors obtained judgment against debtors in amount of $25,565.64 in relation to flooding incident. Creditors learned male debtor had filed consumer proposal under Bankruptcy and Insolvency Act several months earlier. Female debtor made assignment into bankruptcy 15 days after creditors served her with notice of examination. Creditors alleged debtors had substantially undervalued their property and were not insolvent. Creditors brought application for order annulling male debtor’s consumer proposal and resulting deemed assignment into bankruptcy and annulling female debtor’s assignment into bankruptcy. Application dismissed. Market value of property was accepted as being significantly higher than debtors had claimed, but creditors failed to show female debtor’s assignment ought not to have been filed. Female debtor’s monthly expenses exceeded her monthly income by $2,010. Fact that female debtor had access to equity in property did not lead to conclusion that she would be able to meet her obligations generally as they become due. Creditors failed to discharge their onus under s. 181(1) of Act of showing female creditor had not been insolvent person at time of her assignment or had engaged in abuse of process of court.

Kormos v. Fast (2018), 2018 CarswellOnt 16831, 2018 ONSC 6044, Cavanagh J. (Ont. S.C.J.).

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