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Bankruptcy & FRO

If a spouse is the preferred creditor in a bankruptcy, do the trustees send the money to the FRO office and does this only happen after a court date?

Posted from: Ontario

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One Response to “Bankruptcy & FRO”

A licensed trustee said...

The trustee will send the money as directed on the proof of claim for the preferred debt. If FRO submits the claim the funds will be sent to FRO – if the spouse submits the claim then the spouse will receive the money. Preferred claims may be paid at any time the bankrupt estate has sufficient funds to do so – in most cases, trustees will wait until the end of the file just to be certain no other claims come in that rank higher.