GIC lump sum payment during bankruptcy

January 30th, 2014 by Questions


I have a question, my father declared bankruptcy in Sept 2013, he had been very ill in 2011 and was only just at a point of being able to sort of manage his finances. Unfortunately at the end of Oct he ended up in hospital again for 2 months, and is now being moved into a lodge. I am his daughter, I have power of attorney and he is not in a state to deal with his financials at this point in time. I have been filling out his paperwork and as of this month (he moves into the lodge Feb 1st) I will have to start paying the $150/mo fee for him as they only allow him $255/mo to live on as the government subsidizes his rent at the lodge.
It came to light when applying for the lodge that he had failed to file his taxes for a couple years after coming out of the hospital the first time. Which meant that he hasn’t been receiving his Guaranteed Income Supplement. He has now received a lump sum of his backdated GIC, however he is only allowed to earn approx 2,200 a month under the bankruptcy agreement. Does this mean that we have to pay that entire GIC lump sum payment during bankruptcy to the bankruptcy company? He has other bills and personal loans that need paying as well, can I use that money to pay those bills or I am I legally required to give it to the bankruptcy company? It would be nice if he had a bit of savings to fall back on as well.

Please advise as soon as you are able, I don’t want to do anything illegal and get myself or my father into legal trouble.

Posted from: Alberta


One Response to “GIC lump sum payment during bankruptcy”

, A licensed trustee said:

There are specific rules that deal with retro-active government payments. Contact your father’s trustee and ask them how they work. Based on your father’s income, he may be able to retain the entire amount, or he may be subject to a penalty. Look up Directive 11r2 if you want to read the rules yourself.

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