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Paid Severance After Discharge, How Much Do I Lose?

When I went bankrupt in May 2011, I had an outstanding grievance with my employer. I finally reached a settlement in May 2012, after my discharge came in March 2012.

It was for $10,000.00, my trustee is telling me that I am losing $7,000 to the creditors. How is this possible??? He won’t even return my calls now… I think I am going to have to file a complaint.

Posted from: Ontario

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One Response to “Paid Severance After Discharge, How Much Do I Lose?”

A licensed trustee said...

Unfortunately your severance package is subject to the same surplus income rules that your other forms of income were subject to. There’s no way for me to know if 70% was the correct amoutn to penalize you, but if you had income during your bankruptcy then 70% is quite possible.

You have the right to file a complaint with the Office of the Superintendent of Bankruptcy (“OSB”) if you have any concerns regarding your trustees conduct (or the math they used to determine your payment). Simply contact the nearest office of the OSB.