Wrongfull Dismissal Settlement and Personal Bunkruptcy

Hi, I lost my job during the sickness and filed the wrongful dismissal lawsuit against ex employer. This was last year in May. In the mean time I struggle to keep up with all the bills and had lot of medical and legal expenses. My question is: If I file for bankruptcy before the case settles how will it affect me? Will all the funds I receive in settlement be taken away or are the certain provisions that are exempt? ei..legal cost, education reimbursement, general damages, etc.

Posted from: Ontario

One Response to “Wrongfull Dismissal Settlement and Personal Bunkruptcy”

Barton Goth – Goth & Company Inc. -Trustee in Bankruptcy said...

There is a complicated formula in the Bankruptcy and Insolvency Act to deal with just such a situation. It involveds determining whether there was any surplus income in the bankruptcy. In the months there is no surplus income this is reduced out of the lump sum payment of pre-bankruptcy type income and the net amount is remitted to the trusutee as part of the bankruptcy. The formula can be quite complicated, what you should do is meet with a local trustee and they will run through your situation and what you can expect in more detail. But do bring as much information about this action as possible as it will be required to calculate things.