Explore general-information definitions for terms used in the CRE’s Recovery-Path Explorer. These explanations support comprehension; they do not decide rights, remedies, enforceability, or outcomes.
English copy has completed the CRE’s internal general-information review. French machine-assisted copy is clearly identified as awaiting external bilingual legal review.
Commercial obligation
The payment or performance a creditor says is owed under a commercial agreement, invoice, guarantee, or similar record.
Why it matters in the recovery path
The CRE reviews records supporting the obligation before deciding whether a recovery path can be considered.
General example
A business invoice for delivered equipment may record an alleged commercial obligation.
This general description does not determine whether a specific obligation is valid, enforceable, or still owing.
Jurisdiction
The province, territory, or other legal area whose rules and authorities may apply to a file.
Why it matters in the recovery path
Location can affect permitted activity, notice requirements, professional roles, and available next steps.
General example
A creditor in one province and property in another can create a cross-jurisdiction question.
Which rules govern a specific matter is a legal question that may require qualified local advice.
Limitation concerns
Possible time limits that may affect when a legal claim or enforcement step can be started.
Why it matters in the recovery path
Dates and prior events can be important, so timing issues are identified for qualified review rather than assumed.
General example
An old unpaid invoice may require a lawyer to assess dates and later acknowledgements.
The CRE does not calculate or advise on a limitation period; a lawyer or licensed professional should assess a specific deadline.
Insolvency
A situation or formal process in which a person or business cannot meet financial obligations as they become due.
Why it matters in the recovery path
Bankruptcy, proposal, receivership, or related proceedings can change who may communicate, file a claim, or take further steps.
General example
A formal proposal may require a creditor to submit documents through the appointed insolvency professional.
The effect of a particular insolvency proceeding requires case-specific legal or licensed-professional guidance.
Secured-interest records
Documents or registry information showing that a creditor may claim an interest in identified property securing an obligation.
Why it matters in the recovery path
The record, priority, property description, and jurisdiction can affect whether an asset-focused path is relevant.
General example
A financing statement may identify equipment described as security.
A registry entry alone does not establish priority, ownership, or a right to take property; those questions require qualified review.
Collateral
Property identified as security for an obligation, such as equipment, vehicles, inventory, or other business assets.
Why it matters in the recovery path
Descriptions, ownership information, registrations, condition, and current location can shape an asset-focused assessment.
General example
A financed commercial vehicle may be described as collateral in the lender’s records.
The CRE does not assume that property can be taken or sold; authority and any required legal process must be established independently.
Judgment
A formal court decision that may state what one party owes or must do.
Why it matters in the recovery path
The court, date, terms, jurisdiction, and current status can affect what specialist or enforcement review may be appropriate.
General example
A creditor may hold a judgment that records an amount, interest, and court file number.
A judgment does not make every enforcement step automatic; court rules and licensed-professional requirements may apply.
Secondary placement
A file referred after earlier internal or external collection activity did not resolve the account.
Why it matters in the recovery path
Prior contact, disputes, notices, reports, and recovery attempts help prevent duplicated or inappropriate activity.
General example
An agency may refer an unresolved commercial file after its original mandate ends.
A prior placement does not guarantee that another recovery approach is suitable or will produce a result.
Proportionality
Whether a proposed step is reasonably matched to the records, authority, cost, risk, and commercial objective.
Why it matters in the recovery path
The CRE uses this lens to avoid work that appears unsupported, outside scope, or commercially disproportionate.
General example
A costly search may not be proportionate where records are incomplete and the amount is modest.
This is an operational assessment, not legal advice or a prediction of recovery, enforcement, or court outcomes.
Licensed professional
A lawyer, licensed paralegal where permitted, bailiff, sheriff, insolvency professional, or other regulated specialist whose authority depends on the work and jurisdiction.
Why it matters in the recovery path
Some legal, court, insolvency, or enforcement activities must be handled or decided by an appropriately authorized professional.
General example
A court filing or seizure may need to be directed by a lawyer, sheriff, bailiff, or other authorized professional.
The CRE’s operational review does not replace independent advice or work reserved to a court or regulated professional.
Guarantee
A documented promise by another person or business to answer for an obligation if specified conditions are met.
Why it matters in the recovery path
The wording, parties, signatures, consideration, notices, and governing rules can affect whether specialist review is needed.
General example
A company director may have signed a separate document described as a personal guarantee.
Calling a document a guarantee does not establish that it is valid or enforceable; case-specific legal review may be required.
Secured debt
An obligation for which a creditor may claim rights in identified property under an agreement and applicable law.
Why it matters in the recovery path
Documents, registrations, property, priority, default terms, and jurisdiction can change the available review path.
General example
A lender may describe a loan as secured by specified manufacturing equipment.
The label “secured” does not prove priority or authorize possession, sale, or enforcement without the required authority and process.
Assignment
A transfer of some contractual rights or claims from one party to another.
Why it matters in the recovery path
The transfer documents, scope, notice, authority, and account history can affect who may instruct or receive information.
General example
A business may transfer a portfolio of receivables under a written assignment agreement.
Whether rights were validly transferred, and what duties remain, depends on the documents and applicable law.
Settlement
A proposed or documented agreement intended to resolve a dispute or obligation on stated terms.
Why it matters in the recovery path
Authority, amount, timing, releases, confidentiality, defaults, and documentation should be clear before a proposal is accepted.
General example
A creditor may consider a documented lump-sum proposal that is less than the amount claimed.
The CRE does not decide whether a settlement is legally sufficient or suitable for a specific party; independent advice may be appropriate.
Demand letter
A written request that describes an alleged obligation and asks for payment, performance, or another response by stated terms.
Why it matters in the recovery path
Sender authority, accuracy, delivery, tone, deadlines, and jurisdiction-specific requirements can matter.
General example
A letter may summarize invoices and request a response by a stated date.
A demand letter is not a court order and does not by itself prove the claim or create a right to seize property.
Skip tracing
Lawful research intended to verify current contact or location information using permitted sources and documented purposes.
Why it matters in the recovery path
Reliable information helps reduce misdirected communication and informs whether further review is proportionate.
General example
A commercial file may require verification that a business still operates at a recorded address.
A locate result can be incomplete or outdated and does not authorize contact, entry, surveillance, seizure, or any other enforcement step.
Asset investigation
A lawful, purpose-limited review of permitted records that may help identify or verify business assets or related information.
Why it matters in the recovery path
The source, reliability, ownership, encumbrances, location, cost, and intended use of information affect the next decision.
General example
A review may compare financing records with documents describing commercial equipment.
An investigation does not establish ownership, priority, value, or a right to take property, and it does not guarantee that an asset will be located.
Enforcement
A legally authorized process intended to give effect to a court order, security right, or other recognized authority.
Why it matters in the recovery path
The source of authority, court rules, property, notices, exemptions, jurisdiction, and licensed roles must be identified.
General example
A judgment creditor may ask qualified counsel which court-supervised step, if any, can be considered.
The CRE does not provide legal advice or independently exercise powers reserved to courts, sheriffs, bailiffs, lawyers, or other authorized professionals.
Proof of debt
Records offered to support the existence, amount, parties, history, and current status of an alleged obligation.
Why it matters in the recovery path
Contracts, invoices, statements, delivery records, payments, communications, and adjustments can reveal gaps or disputes.
General example
A file may include a signed agreement, invoices, delivery confirmations, statements, and a payment history.
Documents can support a claim but do not by themselves establish every legal element, defeat a dispute, or prove enforceability.
Priority
The order in which competing claims or interests may be recognized against particular property or proceeds.
Why it matters in the recovery path
Registration, timing, type of property, agreements, possession, insolvency, and jurisdiction can affect the analysis.
General example
Two creditors may each claim an interest in the same equipment and require qualified priority analysis.
The CRE does not determine legal priority; registry results or document dates alone may be incomplete and require legal review.
Creditor
A person or organization that says another party owes it payment or performance.
Why it matters in the recovery path
Identity, authority, ownership of the claim, records, instructions, and applicable obligations should be verified.
General example
A supplier that issued unpaid invoices may describe itself as a commercial creditor.
The label creditor does not decide whether an amount is owed, who owns the claim, or what recovery steps are permitted.
Merchant cash advance (MCA)
A commercial funding arrangement commonly described as the purchase of a specified amount of future merchant receivables in exchange for an upfront purchase price. The actual legal characterization of a particular agreement depends on its terms, facts, and applicable law.
Why it matters in an MCA review
The term helps organize the agreement, remittance history, balance support, and next-decision record. It does not determine legal characterization or remedy.
Business revenue expected to arise from future sales or payment streams. In an MCA file, the agreement and records should show how receivables are defined, purchased, reported, and remitted.
Why it matters in an MCA review
The term helps organize the agreement, remittance history, balance support, and next-decision record. It does not determine legal characterization or remedy.
The amount of future receivables identified in an MCA agreement as purchased. It is distinct from the upfront purchase price and should be reconciled against actual remittances, credits, modifications, and the claimed balance.
Why it matters in an MCA review
The term helps organize the agreement, remittance history, balance support, and next-decision record. It does not determine legal characterization or remedy.
A payment mechanism used to deliver an agreed portion or amount of receivables. The agreement may use fixed debits, processor splits, or another method, subject to the actual contract terms.
Why it matters in an MCA review
The term helps organize the agreement, remittance history, balance support, and next-decision record. It does not determine legal characterization or remedy.
A contractual process that may adjust remittances by reference to actual receivables or business performance. Whether it applies, how it operates, and what follows from a request depend on the agreement and facts.
Why it matters in an MCA review
The term helps organize the agreement, remittance history, balance support, and next-decision record. It does not determine legal characterization or remedy.
Definitions are general Canadian operational information, not legal advice. Laws, procedures, limitation periods, licensing, and available steps vary by province or territory and by the facts and documents. The CRE does not determine legal rights through this glossary.
English copy has completed the CRE’s internal general-information review. French machine-assisted copy is clearly identified as awaiting external bilingual legal review.