FILL OUT THE FORM BELOW AND RECEIVE A NO-OBLIGATION CONSULTATION

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If you have unsecured debt of under $10,000 and live in the Province of Ontario filing bankruptcy may not be the best option for you. We suggest you contact the Office of the Superintendent of Bankruptcy at 416-973-6441 to discuss your options, or you can visit their website here.

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Money paid out prior to Bankruptcy

My friend will soon declare Bankruptcy. They are going to cash all of their stocks in to pay me monies owed prior to filing. Can the other creditors come after me to recovery some of the money. Are there any ramifications to what my friend may do. Are there any retroactive dates involved in this.

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One Response to “Money paid out prior to Bankruptcy”

Barton Goth, GCO Inc. Bankruptcy Trustees said...

This is something your friend definitely shoud not do as it is illegal and has significant negative consequences on both you and your friend. The Bankruptcy and Insolvency Act is designed so that all creditors are to be treated in an equal and fair manner, and when transactions such as this take place prior to bankruptcy (and by prior this can mean up to a year depending on the circumstances) the Trustee is obligated to apply to court to have the transaction reversed and a judgment given to all parties for the amount of the transactions in question. As a result you will be named in this transaction, be required to repay all the monies, loose any access to dividends through the bankruptcy process and your friend will have an extremely difficult time being discharged from bankruptcy as he intentionally tried to defraud his creditors.