Option for Taking a buyout from old job

March 5th, 2007 by Questions

Hi, Due to being on indefinite layoff my commonlaw husband and I moved from Ontario to Alberta to find work. After moving to Alberta we had to file Bankruptcy. I have just been offered a buyout from my employer in Ontario. The amount is 75,000.00 which is the amount We were bankrupt for. Can I take this buyout?? If I take cash I will only end up with 50,000.00 if I put it into RSP I will keep the whole amount. Can I do that being BAnkrupt. Can I give the whole amount to the Licensed Insolvency Trustee and wiped clean of debt?? And if so will I be taxed on this amount the following year.


One Response to “Option for Taking a buyout from old job”

, A licensed trustee said:

Contact your trustee immediately – they will determine how this settlment will be handled.

The law allows your trustee a couple of options depending on how they classify this payment. If your trustee treasts it as a “windfall” then the entire amount may be seized. If your trustee treats it as “income” then it will be subject to surplus and you’ll be able to retain some of the money.

I suggest you ask your trustee whether or not the money could be used to file a consumer proposal. In the past, we have used payments like this to negotiate a settlement (deal) with our client’s creditors. The proposal causes the bankruptcy to be annulled and allows the creditors to agree with how the money will be handled (as opposed to your trustee simply deciding for themselves).

Good luck sorting this out.

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