Tax accounting terminology, especially as used by the Canada Revenue Agency, is a complex and confusing subject that many individuals and businesses struggle to understand. However, it is essential to have a basic understanding of tax accounting terminology, as it can help you make informed financial decisions and avoid costly mistakes. For example, understanding terms like “deductions,” “credits,” and “taxable income” can help you maximize your tax savings and reduce your tax liability. Additionally, understanding tax accounting terminology can help you communicate more effectively with your accountant or tax professional, allowing you to better understand your financial situation and make more informed decisions. Overall, having a working knowledge of tax accounting terminology is essential for anyone who wants to manage their finances effectively and avoid costly mistakes when it comes to taxes.

Garnishment: Garnishment refers to a legal process where a creditor can collect debts owed by an individual by obtaining a court order to seize their assets. This can include funds held in the individual’s bank account, wages from their employer, or even their personal property. The purpose of garnishment is to enforce the repayment of debts and allow creditors to recover what they are owed. Garnishment can be a significant concern for individuals who are already struggling with financial difficulties. When someone files for bankruptcy, an automatic stay is put in place to protect them from creditor actions, including garnishment. This means that creditors cannot continue with any garnishment proceedings once the bankruptcy process has started.


Interim Receiver: An Interim Receiver is a court-appointed individual or firm tasked with taking control of the assets of a debtor company until the outcome of the bankruptcy is determined. They are essentially a temporary boss, responsible for managing the affairs of the company until a permanent trustee is appointed. This can include everything from managing finances and making payments to creditors to selling off assets and negotiating with stakeholders. Interim receivers are an important part of the bankruptcy process, as they help to ensure that the company’s assets are managed responsibly and that the interests of all stakeholders are protected.

Lien: A Lien refers to a legal right that a creditor has over a debtor’s property. Essentially, it means that the creditor has a claim to the property and can take possession of it if the debtor fails to meet their financial obligations. Liens can be placed on a variety of assets, including real estate, vehicles, and personal property. Liens play an important role in determining how assets are distributed to creditors. If a creditor has a lien on an asset, they may be entitled to a greater share of the debtor’s assets than other creditors. Understanding liens is important for both debtors and creditors.


Office of the Superintendent of Bankruptcy: The Office of the Superintendent of Bankruptcy (OSB) plays a crucial role in the Canadian bankruptcy system. As the regulatory body overseeing bankruptcy and insolvency matters, the OSB ensures that the process is fair, transparent, and efficient. The primary responsibility of the OSB is to administer and enforce the Bankruptcy and Insolvency Act (BIA) and the Companies’ Creditors Arrangement Act (CCAA). The OSB functions as an independent agency within the federal government, reporting to the Minister of Innovation, Science, and Economic Development. Its main objectives include promoting public confidence in the bankruptcy system, protecting the rights and interests of creditors and debtors, and maintaining a reliable registry of bankruptcies and insolvencies.


Ordinary Resolution An Ordinary Resolution refers to a decision made by the creditors or shareholders of a company during the bankruptcy process. It is a common method used to determine certain matters related to the bankruptcy proceedings, such as the appointment of a trustee or the approval of a restructuring plan. This type of resolution is typically passed by a simple majority vote, meaning that more than 50% of the creditors or shareholders present at a meeting must agree to it for it to be considered valid. The purpose of an ordinary resolution is to ensure that important decisions regarding the bankruptcy process are made with the input and agreement of the affected parties. It allows for a fair and democratic process, where each creditor or shareholder has a say in the outcome. This helps to maintain transparency and accountability throughout the bankruptcy proceedings.