Insolvency

KNOWLEDGE EXPECTED OF: QAFP® Professionals

Highest Knowledge Level: Understanding

Knowledge Levels and Associated Verbs


Awareness
The state of being aware that something exists / to have familiarity with a particular activity or subject
Understanding
To comprehend the general relationship of particulars / to have an expertise with how something works
Application
Ability to put information to use / to use knowledge for relevant, practical purposes
Evaluation
To judge or conclude by utilizing data / a systematic determination of something’s worth or significance
Define
To state exactly the meaning of
Identify
To be aware of / to recognize and correctly name / to locate an appropriate resource
Explain
To make clear the meaning of / to describe something in more detail or reveal relevant facts or ideas related to it
Determine
To ascertain / to come to a decision, such as by investigation or reasoning
Compare
To note the similarities and differences between two or more things
Estimate
To determine an approximate value for
Calculate
To find the value using mathematics
Convert
To change from one form or purpose to another
Evaluate
To reach a conclusion or make a through careful study
Interpret
To give the meaning of / to construe or understand / to translate orally

Hold cursor over or click on each term to read its definition.

  • Define insolvency.
  • Identify the providers and options that can assist an insolvent debtor, such as:
    • Credit counselling agency
    • Financial institutions
    • Personal negotiation with creditors
    • Lawyers
    • Licensed trustees
  • Identify options available to an insolvent debtor, such as:
    • Orderly repayment of debts in certain provinces or territories
    • Debt management programs
    • Consolidation loans
    • Creditor negotiations
    • Proposals pursuant to the Bankruptcy and Insolvency Act
    • Bankruptcy
  • Explain the priority interests of secured and unsecured creditors in the event of insolvency.
  • Identify that bankruptcy is governed under the federal Bankruptcy and Insolvency Act.
  • Identify the obligations that may not be included in a bankruptcy, such as:
    • Alimony and child support payments
    • Student loans (if studies ceased less than seven years ago)
    • Court-ordered fines or penalties
    • Debts arising from fraud
  • Identify implications of bankruptcy, such as:
    • Sale of assets
    • Trustee deals with creditors on debtor’s behalf
    • Ability to borrow in the future may be impacted
    • Record of bankruptcy on credit rating for six to fourteen years

KNOWLEDGE EXPECTED OF: CFP® Professionals

Highest Knowledge Level: Understanding

Knowledge Levels and Associated Verbs


Awareness
The state of being aware that something exists / to have familiarity with a particular activity or subject
Understanding
To comprehend the general relationship of particulars / to have an expertise with how something works
Application
Ability to put information to use / to use knowledge for relevant, practical purposes
Evaluation
To judge or conclude by utilizing data / a systematic determination of something’s worth or significance
Define
To state exactly the meaning of
Identify
To be aware of / to recognize and correctly name / to locate an appropriate resource
Explain
To make clear the meaning of / to describe something in more detail or reveal relevant facts or ideas related to it
Determine
To ascertain / to come to a decision, such as by investigation or reasoning
Compare
To note the similarities and differences between two or more things
Estimate
To determine an approximate value for
Calculate
To find the value using mathematics
Convert
To change from one form or purpose to another
Evaluate
To reach a conclusion or make a through careful study
Interpret
To give the meaning of / to construe or understand / to translate orally

Hold cursor over or click on each term to read its definition.

  • Define insolvency.
  • Identify the providers and options that can assist an insolvent debtor, such as:
    • Credit counselling agency
    • Financial institutions
    • Personal negotiation with creditors
    • Lawyers
    • Licensed trustees
  • Identify options available to an insolvent debtor, such as:
    • Orderly repayment of debts in certain provinces or territories
    • Debt management programs
    • Consolidation loans
    • Creditor negotiations
    • Proposals pursuant to the Bankruptcy and Insolvency Act
    • Bankruptcy
  • Explain the priority interests of secured and unsecured creditors in the event of insolvency.
  • Identify that bankruptcy is governed under the federal Bankruptcy and Insolvency Act.
  • Identify the obligations that may not be included in a bankruptcy, such as:
    • Alimony and child support payments
    • Student loans (if studies ceased less than seven years ago)
    • Court-ordered fines or penalties
    • Debts arising from fraud
  • Identify implications of bankruptcy, such as:
    • Sale of assets
    • Trustee deals with creditors on debtor’s behalf
    • Ability to borrow in the future may be impacted
    • Record of bankruptcy on credit rating for six to fourteen years