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Overpayment of salary – debt owed to the Receiver General, and bankruptcy

I am a federal public servant on a leave of absence without pay, going on close to two years now. There was an overpayment of salary that is owed to the Receiver General of Canada upon either my return to work or resignation. Would this debt be covered in a personal bankruptcy?

One Response to “Overpayment of salary – debt owed to the Receiver General, and bankruptcy”

Doug Stuive, CA | Trustee | CIRP said...

If that overpayment was not resulting from something that could be constituted as fraud, nor does it meet the criteria laid out in Section 178 of the Bankruptcy and Insolvency Act, then that overpayment can be discharged by filing for bankruptcy. This debt would be a provable claim in your bankruptcy estate as the overpayment existed at the time of filing for bankruptcy. While I have not seen a case where the Receiver General was owed money due to salary overpayment I have seen how they have treated other over payments. For example, if there was an overpayment of the child tax benefit this debt is included in bankruptcy. Any refunds from the pre-bankruptcy period are used to offset the debt owing but the child tax benefit payment is paid to the bankrupt for all post-bankruptcy credits. Without more information we cannot definitively say it can be discharged but as it has been described above it appears to be a provable claim in the bankruptcy that would be discharged.