Bankruptcy and Employment.
I may have to file for bankruptcy over a 200,000 dollar loan caused by speculative stock market investments. I never spent a dime of borrowed money in my life , the one and only time I took a risk with borrowed money it backfired on me.
My question is: I have been working for this small firm for 10 years and know the owner on personal terms. If I were to explain the situation to him I`am sure that he will be more than willing to restructure my compensation package to reduce my base salary and award me a nominally `performance linked` bonus after the bankruptcy discharge. Will this be legal?
I know that this kind of arrangement stinks morally.
Posted from: Ontario
This type of action is an offense under the Bankruptcy and Insolvency Act (BIA)and is akin to fraud. The BIA is designed to prevent people from purposely organizing their finances to the detriment of their creditors and if it is discovered that something like this has taken place you would likely be ineligible for automatic discharge and the court would likely impose significant penalties as a result this kind of behavior. So don’t do it. If you have to file for bankruptcy it will be easier for everyone if you simply leave things as they are, meet with a local trustee and be honest.