OPTIONS student loans consolidation

					                                                                                                                    MacKay & Company Ltd.
INFORMATION HANDOUT - D ecember 2001                                                                           formerly Barnes, Kissack, Henfrey and
If you have a debt problem, the following table suggests various options which may be available to you to deal wit h your fina ncial
difficulties.

OPTIONS                                     ADVANTAGES                                  DISADVANTAGES
Increase Income – Reduce Living             - Maintain same lifestyle                   - Ma y not solve mismanagement problems
Expenses                                    - Develop responsibility & skills           - Ma y interfere with primary job, studies, family life
                                            - More money available                      - Lifestyle will change
Convert Assets to Cash                      - Lifestyle will be maintained              - Assets may be sold at a lower market value
                                            - Using assets accumulated for such         - Reduced collateral, may have ta x implications
                                              purpose (Canada Savings Bonds,            - Alternative transportation or housing may have to
                                              RRSPs, life insurance, stocks)              be found
Informal arrangem ent with Creditors        - Creditors may be cooperative if kept      - Lower payments over longer term will increase
    set up by debtor                         informed                                    interest costs;
                                            - Will prevent harassment, wage             - Creditors may not be agreeable;
                                              garnishment, repossession, damage to      - No stay of proceedings;
                                              credit rating                             - Will change lifestyle;
                                            - Less stigma than bankruptcy

   set up by credit counselor              - Creditors may agree if third party        - Fees may be large;
                                              contacts them                             - No guarantee of success if creditors do not accept
                                            - Service may be at low cost or free          payment plan;
                                                                                        - No stay of proceedings
Deb t Consolidation Loan                    - Ma y reduce monthly payments &            - Spending pattern may not change;
                                              interest on debt balances;                - Ma y continue to use credit cards;
                                            - Ability to budget monthly income &        - Ma y increase cost of total debts (lower payments
                                              expenses more effectively;                  over longer period resulting in higher interest
                                            - Pays existing creditors;                    costs);
Orderly Payment of Deb ts                   - Consolidating through Court Order;        - Cannot obtain further credit, lifestyle change;
Debtors Assistance Branch, Province of BC   - One monthly payment;                      - Reported on credit record for 3 years after
                                            - Interest reduced to 5% per year;            completion;
                                            - Stay of proceedings while Order           - Creditor who has security may elect at any time to
                                              applies;                                    realize on security;
                                            - Debts are repaid in full over 3 years;    - Creditors obtain Judgment;
                                            - $20 filing fee;                           - Consent of creditors required if payment term is
                                                                                          longer than 3 years;
                                                                                        - Default occurs when payments not made for 90
                                                                                          days;
Consumer Proposal                           - Ability to compromise debts for less      - Debts, excluding mortgage on residence, cannot
 Creditor Approval 50% of Dollars of         than 100 cents;                             exceed $75,000;
  proven claims                             - Stay of proceedings while Proposal in     - Separate arrangements for secured creditors;
 Deemed Court Approval                       effect;                                   - Lifestyle change;
 Two counselling sessions to attend        - One monthly payment or lump sum           - Ma y not succeed if debtor does not have steady
                                              settlement;                                 income or employment;
                                            - No interest charged;                      - Default in payment can lead to annulment;
                                            - Payment term up to 5 years;               - Notation on credit record for 3 years following
                                            - No creditors meeting unless                 completion;
                                              requested;                                - Some debts not included;
                                            - No automatic bankruptcy;                  - Ma y have income tax implications;
                                            - Fees based on percentage of proposal
                                              payments;
                                            - Maintain control of assets;
Division 1 Proposal                         - Stay of proceedings                       - Must have creditor meeting, bankruptcy if creditors
    Creditor Approval 2/3 in value of      - Ability to compromise debts for less        reject;
     proven creditors and 50% in number       than 100 cents, monthly payment or        - Fees based on hourly rate of MacKa yCo;
    Application to Court for Approval        lump sum settlement;                      - Notation on credit record for 3 years from
                                            - Process available to both consumers         completion;
                                              and businesses;                           - Lifestyle change;
                                            - Maintain control of assets;               - Some debts not included;
                                                                                        - Ma y have Income Tax implications;
Bankruptcy                                  - Stay of proceedings;                      - Liquidation of non-exempt assets;
  Two counselling sessions to attend       - Rehabilitation without burden of debts;   - All credit cards turned in to MacKayCo;
  Monthly reporting to MacKa yCo of        - Automatic Discharge for first time        - Lack of legal capacity of a bankrupt;
   Income and Expenses                        bankrupts.                                - Non-compliance with duties & commission of
                                                                                          offences can result in prison, fines, or both;
                                                                                        - Difficulties in obtaining discharge;
                                                                                        - MacKayCo’s entitlement after acquired assets.
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BANKRUPTCY vs. CONSUMER PROPOSAL
Many debtors who have the ability to pa y something towards          Creditor’s Rights and Duties
their creditors have opted for the bankruptcy route because of       -  A creditor is entitled to receive notice of the bankruptcy and
the relatively short period of time before a discharge could be         Consumer Proposal, attend the meeting of creditors if one is
granted (nine months for a first time bankrupt). Amendments to          required, in person or by proxy, and vote if they ha ve filed a
the Bankruptcy & Insolvency Act came into effect April 30, 1998,        Proof of Claim with MacKayCo before the meeting.
and have created two new grounds for opposing a bankrupt’s           -  A creditor is entitled to receive its pro rata share of any amount
discharge. They are: non-compliance with the requirement to             collected in the Consumer Proposal or in the liquidation of the
pay surplus income and the fact that the debtor chose to file           assets of the bankrupt if the creditor has proven its claim
bankruptcy when he or she could have made a viable proposal to          satisfactory.
creditors as a means to resolve their financial difficulty.          -  A creditor is bound by the stay of proceedings of the
                                                                        Bankruptcy & Insolvency Act and cannot continue or start any
The purpose for these changes is to encourage more debtors to           legal actions to collect its debt, nor can they garnish your
file a Consumer Proposal as opposed to filing a bankruptcy              wages or seize your property, such as bank accounts.
assignment. Credit reporting agencies are co-operative in            -  The stay of proceedings does not apply for outstanding child
making this choice more advantageous by limiting the time the           support, family maintenance and alimony payments.
Consumer Proposal is noted on the credit report to three years
after completion. The fact of filing bankruptcy is noted on the      WHAT YOU SHOULD KNOW ABOUT…
report for six years following discharge.
                                                                     Garnishment
RIGHTS AND DUTIES                                                    -  Stay of proceedings in effect on the filing of an assignment in
                                                                        bankruptcy or Consumer Proposal prevents any creditor from
Debtor’s duties in a Consumer Proposal                                  seizing wages or other earnings, except alimony/child support
-  A debtor must comply with the proposed payments.                     payments.
-  If a debtor fails to make payments for three months, the          -  Please provide MacKayCo with copies of all documents
   consumer proposal is deemed to be annulled.                          relating to the wage garnishee. MacKayCo will notify your
-  A debtor is required to advise MacKayCo if there is any              employer’s payroll department of your bankruptcy/proposal
   financial change in their circumstance.                              and the garnishee proceedings will cease.

Bankrupt’s Duties                                                    Legal Actions
-  The bankrupt must fulfill all of the duties which are outlined    -  Most legal actions stop on the date you declare bankruptcy or
   in Section 158 of the Bankruptcy & Insolvency Act (see               file a Consumer Proposal. Criminal actions and some civil
   Reprints on last page).                                              matters, such as in matrimonial matters, are not affected by
-  The bankrupt has a responsibility to fulfill his or her              the bankruptcy or proposal.
   obligations and behave in a fair manner with the creditors. If    -  You must provide MacKayCo with copies of any legal
   found guilty of any of the offences listed in Section 198, 199       documents in your possession.
   and 200 of the Bankruptcy & Insolvency Act (see Reprints
   on last page), a bankrupt is liable to imprisonment, fine or      Co-Signers
   both.                                                             -   Bankruptcy or the Consumer Proposal does not cancel out the
-  To disclose all assets and all creditors (Section 49 and 158          responsibility of anyone who has guaranteed or co-signed a
   of the Bankruptcy & Insolvency Act).                                  loan on the bankrupt’s or debtor’s behalf. If an yone has co-
                                                                         signed any debts on your behalf, you should make them aware
Bankrupt’s Rights                                                        of the steps you are taking to resolve your financial difficulty.
-  You must assign all your assets to MacKayCo who will
   liquidate them for the benefit of your creditors, however, you    Credit Rating
   are entitled to retain some of the assets which are exempt        -  Once you have so much debt that a Proposal or bankruptcy is
   from seizure. In BC, the exemptions are governed by the              needed, your credit rating has likely been seriously affected.
   Court Order Enforcement Act which allows each debtor to           -  Bankruptcy will be a mark on your credit rating for 6 years after
   retain:                                                              you are discharged. In addition, committing to an Orderly
   $4,000 of household furnishings and appliances,                      Payment of Debt program or Consumer Proposal will also be
   $10,000 tools of the trade, $5,000 equity in a vehicle unless        noted on your record, however the implications of doing the
   the debtor has family maintenance obligations                        latter two are not as serious as filing an assignment in
   and then it drops to $2,000, $12,000 equity in a house in the        bankruptcy.
   Greater Vancouver Regional District and Capital Regional
   (Victoria), all other areas $9,000, plus all necessary clothing   Windfalls
   and required medical aids.                                        -  If you win the lottery or are entitled to receive an inheritance
-  GST credits are now exempt but will be sent to MacKayCo              before your discharge from bankruptcy becomes effective,
   and only refunded to the bankrupt if there is a dividend to          these windfalls must be turned over to MacKayCo for
   creditors.                                                           distribution to your creditors.




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Payments & Surplus Income Obligations                                 -   Two counselling sessions will occur after filing: the first within
                                                                                                  nd
-  On bankruptcy/proposal, your payments to your creditors will            two months and the 2 within 7 months. These sessions will
   cease. While you are an undischarged bankrupt, you are                  focus on money management, spending and shopping habits,
   required to pay a portion of your family income, net of taxes,          warning signs of financial difficulty, obtaining and using credit,
   to MacKa yCo for the distribution to your creditors. These              and non-budgetary causes of insolvency.
   payments are made according to standards issued by the             -   These two sessions are mandatory. Bankrupts who refuse
   Superintendent of Bankruptcy. This amount is subject to                or neglect to receive the required counselling will not qualify for
   approval by the creditors and the Superintendent of                    an automatic discharge.
   Bankruptcy. If these parties cannot agree on the amount to
   be paid, a mediation process is available.                         Discharge from Bankruptcy
                                                                      -   In order to be released of most of your debts, you must be
-  You are also required to inform MacKayCo of any material
                                                                          discharged from bankruptcy.
   change in your financial situation. You will be required to
                                                                      -   If you are filing for bankruptcy for the first time, then you are
   complete Income and Expense Statements on a monthly
                                                                          eligible to be automatically discharged nine months from your
   basis and to file them with MacKayCo with proof of income.             assignment date. Although creditors cannot stop you from
-  Failure to file Monthly Income and Expense Statements and              filing an assignment in bankruptcy, they have the right to stop
   to make payments of “surplus income” will affect your ability          you from being automatically discharged. Two other parties
   to obtain a discharge from bankruptcy.                                 can also prevent you from being discharged, and they are the
                                                                          Superintendent of Bankruptcy and MacKayCo.
Tax Returns                                                           -   There are some debts that you may still be responsible for
-   Two income tax returns are prepared for the year in which             after the filing of a bankruptcy or Consumer Proposal, see
    you file for bankruptcy. The pre-bankruptcy return covers             section below.
    the period from January 1 to your assignment date. The            -   If MacKayCo recommends a conditional discharge and the
    post-bankruptcy return covers the period from your                    bankrupt agrees with the recommendation, then that becomes
    assignment date to December 31. You must provide the                  the conditional discharge order which cannot exceed 12
    required information.                                                 months. If the parties cannot agree a mediation process is
-   Refunds due for the pre-bankruptcy period are mailed                  available.
    directly to MacKayCo. Refunds due for the post-bankruptcy         -   If opposition is filed, then MacKayCo will have to obtain a date
                                                                          for a Court hearing. In determining your discharge, a Court
    period are deemed to be assets and you will be required to
                                                                          official has several options to choose from. These are:
    assign these refunds to the estate for distribution to               Order of Absolute Discharge
    creditors. If you refuse to voluntarily turn over the refund to       -     This order relieves you of the debts incurred before you
    the estate, MacKayCo is required to advise the Court on                     declared bankruptcy with the exception of those debts
    your discharge.                                                             mentioned in Section 178.
-   If you are self-employed, your bankruptcy will not cancel out        Order of Conditional Discharge
    your liability for Canada Pension Plan contributions in the           -     This imposes certain conditions that must be met before
    calendar year of bankruptcy. Calculation of CPP is done on                  your discharge becomes absolute. An example of this is
    the post-bankruptcy return and based on the whole year’s                    payment of a certain sum of money over time.
    self-employed earnings.                                              Order of Suspended Discharge
-   If there is a balance owing from the post-bankruptcy income           -     The Court orders a delay before making the discharge
    tax return, it will be your responsibility to pa y Revenue                  “absolute”. The most common reason for delaying the
    Canada. If you are self-employed or are receiving pension or                discharge is a failure of the bankrupt to perform his duties.
    other funds without having tax deducted at the source, then                 If the Court believes that the bankruptcy resulted from
    MacKayCo will discuss with you the payment of tax                           circumstances that were in the debtor’s control, then the
                                                                                discharge may be suspended if the debtor is not in a
    installments.
                                                                                position to make payments.
Fees of MacKayCo
                                                                      Debts Not Included in Bankruptcy or Consumer Proposal
- MacKayCo’s fees are governed by a tariff which is set out in        -  These debts are listed in Section 178 and include: Court fines
    the Bankruptcy & Insolvency Act. If there are no assets              or penalties; award damages by a Court in a respect of bodily
    which we can realize on, MacKa yCo must look to the                  harm, sexual assault, or wrongful death resulting therefrom;
    bankrupt or a third party for pa yment.                              debts owing for alimony or child support, debts arising form
- Legal aid does not provide for payment of fees and                     fraud or fraudulent misrepresentation; any liability for a
    MacKayCo is not paid by the government or by the                     dividend that a creditor would have received if he or she had
    Superintendent of Bankruptcy.                                        been listed; or debts owing for s tudent loans where the date of
                                                                         bankruptcy/consumer proposal occurred before completion of
Counselling                                                              studies or within 10 years of ceasing to be a student. Also not
- Prior to signing documents, MacKayCo will assess your                  discharged is interest added to any of these debts.
   financial situation, provide alternatives that may be available
   to you and discuss the pros and cons of each.




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(1)     SECTION 67 - PROPERTY OF THE BANKRUPT

        The property of a bankrupt divisible amongst his creditors shall not comprise

        (a)      property held by the bankrupt in trust for any other person,

        (b)      any property that as against the bankrupt is exempt from execution or seizure under any laws applicable in
                 the province within which the property is situated and within which the bankrupt resides, or

        (b.1)    such goods and services tax credit payments and prescribed payments relating to the essential needs of an
                 individual as are made in prescribed circumstances and are not property referred to in paragraph (a) or (b),

        BUT IT SHALL COMPRISE

        (c)      all property wherever situate of the bankrupt at the date of his bankruptcy or that may be acquired by or
                 devolve on him before his discharge, and

        (d)      such powers or in over or in respect of the property as might have been exercised by the bankrupt for his
                 own benefit.


(2)     SECTION 158 - DUTIES OF BANKRUPTS

        The Bankrupt Shall

        (a)      make discovery of and deliver all his property that is under his possession or control to the Trustee or to any
                 person authorized by the Trustee to take possession of it or any part thereof;

                 (a.1)    in such circumstances as are specified in directives of the Superintendent, deliver to the Trustee, for
                          cancellation, all credit cards issued to and in the possession or control of the bankrupt;

        (b)      deliver to the Trustee all books, records, documents, writings and papers including, without restricting the
                 generality of the foregoing, title papers, insurance policies and tax records and returns and copies thereof in
                 any way relating to his property or affairs;

        (c)      at such time and place as may be fixed by the Official Receiver, attend before the Official Receiver or before
                 any other Official Receiver delegated by the Official Receiver for examination under oath with respect to his
                 conduct, the causes of his bankruptcy and the disposition of his property;

        (d)      within five days following the bankruptcy, unless the time is extended by the Official Receiver, prepare and
                 submit to the Trustee in quadruplicate a statement of the bankrupt's affairs in the prescribed form verified by
                 affidavit and showing the particulars of the bankrupt's assets and liabilities, the names and addresses of the
                 bankrupt's creditors, the securities held by them respectively, the dates when the securities were
                 respectively given and such further or other information as may be required, but where the affairs of the
                 bankrupt are so involved or complicated that the bankrupt alone cannot reasonably prepare a proper
                 statement of affairs, the Official Receiver may, as an expense of the administration of the estate, authorize
                 the employment of a qualified person to assist in the preparation of the statement;

        (e)      make or give all the assistance within his power to the Trustee in making an inventory of his assets;

        (f)      make disclosure to the Trustee of all property disposed of within the period beginning on the date that is one
                 year before the date of the initial bankruptcy event or beginning on such other antecedent date as the Court
                 may direct, and ending on the date of bankruptcy, both dates included, and how and to whom and for what
                 consideration any part thereof was disposed of except such part as had been disposed of in the ordinary
                 manner of trade or used for reasonable personal expenses;

        (g)      make disclosure to the Trustee of all property disposed of by gift or settlement without adequate valuable
                 consideration within the period beginning on the day that is five years before the date of the initial
                 bankruptcy event and ending on the date of the bankruptcy, both dates included;
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        (h)      attend the first meeting of his creditors unless prevented by sickness or other sufficient cause and submit
                 thereat to examination;

        (i)      when required, attend other meetings of his creditors or of the inspectors, or attend on the Trustee;

        (j)      submit to such other examinations under oath with respect to his property or affairs as required;

        (k)      aid to the utmost of his power in the realization of his property and the distribution of the proceeds among
                 his creditors;

        (l)      execute such powers of attorney, conveyances, deeds and instruments as may be required.

        (m)      examine the correctness of all proofs of claim filed, if required by the Trustee;


        (n)      in case any person has to his knowledge filed a false claim, disclose the fact immediately to the Trustee;

                 (n.1)    inform the Trustee of any material change in the bankrupt's financial situation;

        (o)      generally do all such acts and things in relation to his property and the distribution of the proceeds amongst
                 his creditors as may be reasonably required by the Trustee, or may be prescribed by the General Rules, or
                 may be directed by the Court by any special order made with reference to any particular case or made on
                 the occasion of any special application by the Trustee, or any creditor or person interested; and

        (p)      until his application for discharge has been disposed of and the administration of the estate completed,
                 keep the Trustee advised at all times of his place of residence or address.


(3)     SECTION 159 - WHERE BANKRUPT IS A CORPORATION

        Where a bankrupt is a corporation, the officer executing the assignment, or such

        (a)      officer of the corporation, or
        (b)      person who has, or has had, directly or indirectly, control in fact of the corporation

        as the Official Receiver may specify, shall attend before the official receiver for examination and shall perform all of
        the duties imposed on a bankrupt by Section 158, and, in case of failure to do so, the officer or person is punishable
        as though that officer or person were the bankrupt.


(4)     SECTION 178 - DEBTS NOT RELEASED BY ORDER OF DISCHARGE

        (1)      An order of discharge does not release the bankrupt from:

                 (a)      any fine, penalty, restitution order or other order similar in nature to a fine, penalty or restitution
                          order, imposed by a Court in respect of an offence, or any debt arising out of a recognizance or bail;

                 (a.1)    any award of damages by a court in civil proceedings in respect of

                          (i)     bodily harm intentionally inflicted, or sexual assault, or
                          (ii)    wrongful death resulting therefrom;

                 (b)      any debt or liability for alimony;

                 (c)      any debt or liability under a support, maintenance or affiliation order or under an agreement for
                          maintenance and support of a spouse or child living apart from the bankrupt;

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                 (d)      any debt or liability arising out of fraud, embezzlement, misappropriation or defalcation while acting
                          in a fiduciary capacity.

                 (e)      any debt or liability for obtaining property by false pretences or fraudulent misrepresentation;

                 (f)      liability for the dividend that a creditor would have been entitled to receive on any provable claim not
                          disclosed to the Trustee unless such creditor had notice or knowledge of the bankruptcy and failed
                          to take reasonable action to prove his claim;

                 (g)      any debt or obligation in respect of a loan made under the Canada Student Loans Act, the Canada
                          Student Financial Assistance Act or any enactment of a province that provides for loans or
                          guarantees of loans to students where the date of bankruptcy of the bankrupt occurred

                          (i)     before the date on which the bankrupt ceased to be a full- or part-time student, as the case
                                  may be, under the applicable Act or enactment, or

                          (ii)    within ten years after the date on which the bankrupt ceased to be a full- or part-time student;
                                  or

                 (h)      any debt for interest owed in relation to an amount referred to in any of paragraphs (a) to (g)

        (1.1)    At any time after ten years after a bankrupt who has a debt referred to in paragraph (1)(g) ceases to be a full
                 or part-time student, as the case may be, under the applicable Act or Enactment, the Court may, on
                 application, order that subsection (1) does not apply to the debt if the Court is satisfied that

                 (a)      the bankrupt has acted in good faith in connection with the bankrupt's liabilities under the loan; and

                 (b)      the bankrupt has and will continue to experience financial difficulty to such an extent that the
                          bankrupt will be unable to pay the liabilities under the loan.

        (2)      Subject to subsection (1), an order of discharge releases the bankrupt from all claims provable in
                 bankruptcy.


(5)     SECTION 198 - BANKRUPTCY OFFENSES

        (1)      Any bankrupt who:

                 (a)      makes any fraudulent disposition of the bankrupt's property before or after the date of the initial
                          bankruptcy event,

                 (b)      refuses or neglects to answer fully and truthfully all proper questions put to the bankrupt at any
                          examination held pursuant to this Act,

                 (c)      makes a false entry or knowingly makes a material omission in a statement or accounting,

                 (d)      after or within one year immediately preceding the date of the initial bankruptcy event, conceals,
                          destroys, mutilates, falsifies, makes an omission in or disposes of, or is privy to the concealment,
                          destruction, mutilation, falsification, omission from or disposition of, a book or document affecting or
                          relating to the bankrupt's property or affairs, unless the bankrupt had no intent to conceal the state of
                          the bankrupt's affairs,

                 (e)      after or within one year immediately preceding the date of the initial bankruptcy event, obtains any
                          credit or any property by false representations made the bankrupt or made by any other person to
                          the bankrupt's knowledge,

                 (f)      after or within one year immediately preceding the date of the initial bankruptcy event, fraudulently
                          conceals or removes any property of a value of fifty dollars or more or any debt due to or from the
                          bankrupt, or
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                 (g)      after or within one year immediately preceding the date of the initial bankruptcy event, hypothecates,
                          pawns, pledges or disposes of any property that the bankrupt has obtained on credit and has not
                          paid for, unless in the case of a trader the hypothecation, pawning, pledging or disposing is in the
                          ordinary way of trade and unless the bankrupt had no intent to defraud,

                 is guilty of an offence and is liable, on summary conviction, to a fine not exceeding five thousand dollars or
                 to imprisonment for a term not exceeding one year or to both, or on conviction on indictment, to a fine not
                 exceeding ten thousand dollars or to imprisonment for a term not exceeding three years or to both.

        (2)      A bankrupt who, without reasonable cause, fails to comply with an order of the Court made under Section
                 68 or to do any of the things required of the bankrupt under Section 158 is guilty of an offence and is liable

                 (a)      on summary conviction, to a fine not exceeding five thousand dollars or to imprisonment for a term
                          not exceeding one year, or to both: or

                 (b)      on conviction on indictment, to a fine not exceeding ten thousand dollars or to imprisonment for a
                          term not exceeding three years, or to both.


(6)     SECTION 199 - FAILURE TO DISCLOSE FACT OF BEING UNDISCHARGED

        AN UNDISCHARGED BANKRUPT WHO:

        (a)      engages in any trade or business without disclosing to all persons with whom the undischarged bankrupt
                 enters into any business transaction that the undischarged bankrupt is an undischarged bankrupt, or

        (b)      obtains credit to a total of five hundred dollars or more from any person or persons without informing such
                 persons that the undischarged bankrupt is an undischarged bankrupt,

        is guilty of an offence punishable on summary conviction and is liable to a fine not exceeding five thousand dollars
        or to imprisonment for a term not exceeding one year, or to both.


(7)     SECTION 200 - BANKRUPT FAILING TO KEEP PROPER BOOKS OF ACCOUNT

        (1)      Any person becoming bankrupt or making a proposal who has on any previous occasion been bankrupt or
                 made a proposal to the person's creditors is guilty of an offence punishable on summary conviction and is
                 liable to a fine not exceeding five thousand dollars or to imprisonment for a term not exceeding one year, or
                 to both, if:

                 (a)      being engaged in any trade or business, at any time within the period beginning on the day that is
                          two years before the date of the initial bankruptcy event and ending on the date of the bankruptcy,
                          both dates included, that person has not kept and preserved proper books of account; or

                 (b)      within the period mentioned in paragraph (a) that person conceals, destroys, mutilates, falsifies, or
                          disposes of, or is privy to the concealment, destruction, mutilation, falsification or disposition of, any
                          book or document affecting or relating to the person's property or affairs, unless the person had no
                          intent to conceal the state of the persons affairs.

        (2)      Proper books of account defined. For the purposes of this section, a debtor shall be deemed not to have
                 kept proper books of account if he has not kept such books or accounts as are necessary to exhibit or
                 explain his transactions and financial position in his trade or business, including a book or books containing
                 entries from day to day in sufficient detail of all cash received and cash paid, and, where the trade or
                 business has involved dealings in goods, also accounts of all goods sold and purchased, and statements of
                 annual and other stock-takings.

You are also notified that:

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        (a)      under the Canada Corporations Act and the Companies Act of the various Provinces, you may not be the
                 Director of a limited company while an undischarged bankrupt.

        (b)      individuals or corporations, who have co-signed or guaranteed your debts, will now become responsible for
                 the payment of them.

        (c)      if you were involved in a business, you may be responsible for certain governm ent creditors whose debts
                 may not be discharged pursuant to Section 178 of the Bankruptcy and Insolvency Act.




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