Government pension and bankruptcy

April 23rd, 2010 by Questions

My parents have been forced to go into retirement and start collecting their Canada pension (which isn`t much) and that leaves them unable to pay their mortgage & bills. They`ve decided at this point to put the house up for sale but there was a remortgage on it about two years ago where they borrowed against it so when they sell it there won`t be any money left over. In essence they may end up still owing on it even after they sell it.

They have a car which is in the same situation as the house. They`ve been told that they type of loan they have on the car states that they are protected when they can`t pay for it & can give it back to the dealer without penalty.

They are seriously considering filing for bankruptcy after the house sells but are concerned that they will lose their government pension. Can you please tell me if in fact they will lose any part of their Canada pension if they do file?

Many thanks for your response.

Posted from: Ontario


One Response to “Government pension and bankruptcy”

, Barton Goth - Goth & Company Inc. -Trustee in Bankruptcy said:

If your parents file for bankruptcy there wouldn’t be any direct impact on your parents pensions.

However, there is a cost of filing for bankruptcy that they would be required to cover and that would obviously have to come out of their typical income, but otherwise their pensions will continue to be received as they are currently.

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