CPP disability back pay

May 30th, 2006 by Questions

I recently was accepted for a CPP disability pension. They gave me a cheque for 20,000 dating back to Sept. 2004 with future monthly payments of 1032. My private Long Term Disability payments will now be reduced by the appropriate monthly amount of 1032 dollars (from 1400/month to 368 per month). I now owe the private insurance company the backpay that I received.
Questions: I am facing certain bankruptcy in the near future. If I pay this full amount to the private insurance company does this constitute showing favourtism to one creditor over another? Should I split this 20,000 equally amongst my creditors?
If I split the funds equally where do I stand with the balance owing to the private insurance company when I go bankrupt? Can they hold off future payments until debt is retired or must they continue paying what they now owe on a monthly basis (368/month)?


One Response to “CPP disability back pay”

June 02, 2006 at 5:30 pm, Darcie said:

I had a similar situation and at that time my trustee explained to me that money obtained for that reason was not subject to claim by the trustee.

Further more he told me that because I was in bankrupcy I did not owe the back money to the insurance company. They started taking it by not paying me. I sued them.

One day before we were due in court they settled and gave me my money back.

Unless the law has been changed I would get in touch with a lawyer who is knowledgeable of insurance and bankruptcy laws when it comes to disability payments.

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