Gifts received during bankruptcy
My brother in law passed away in January of this year and my sister in law has just recently sent us a cheque in the amount of 5K to be used for our children`s education in honour of their uncle. The cheque is made payable to both my husband and myself (we declared bankruptcy in February 2009). Our family including the children and is not aware that we have declared bankruptcy and we wish to keep it that way. My question is how do we handle the cheque? We are paying surplus income. Because the cheque is made out to us will this be added to our income or will we be expected to turn over the entire amount to our trustee?
Posted from: Ontario
You won’t like this answer, but a “gift” is not income, it is a windfall (free money). You are required to tell your trustee about the gift and likely the entire amoutn will be seized for yuor creditors.
If you’ve already accepted the gift it complicates things – if you haven’t accepted the gift then I suggest yuo refuse it. If the family wants to set aside funds for your children’s education look into RESPs that they can depsoit money into directly.
If you want to be “sneaky” you’ll need to speak to a lawyer. Trustee’s are not permitted to tell yuo how to defeat the law – think of us as referees. A ref won’t tell you how to break the rules in a hockey game, but they will call them on it when you do.