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CCTB / UCCB and Bankruptcy

I just got a letter from Canadian government saying now I owe back significant amount of CCTB and UCCB.  I am not able to make those payments as I do not work and I have a lot of debt and thinking of beginning bankruptcy procedure.

I also have a student loans to pay back and I am unable to do so also cause of work and I haven’t been in school in over 7 years.

Do these debts get included in bankruptcy?

Posted from: Quebec

One Response to “CCTB / UCCB and Bankruptcy”

Jillian Taylor-Mancusi, Trustee | B.A. | C.I.R.P said...

When you refer to CCTB we are assuming that you are reefing to the Canadian Child Tax Benefit. By using the acronym UCCB we assume that you are referring to the Universal Child care Tax Benefit. The eligibility for these tax benefits is based on the information provided in your income tax return. If you misrepresenting your situation on your income tax return it may have resulted in you obtaining the funds by misrepresentation. As such the government may take the position that the debt arose out of misrepresentation and as such would not be discharged in a bankruptcy. However, this is not always the case, there are many circumstances which could lead to such overpayments that do not stem from misrepresentation or fraud. You may wish to talk to a trustee in bankruptcy and explain the situation in detail, the trustee can give you an opinion that constitutes a debt that does not get discharged in bankruptcy.

The student loan situation is a little more straight forward. If you have not been a student for seven years the student loan debt is a claim provable in bankruptcy and can be discharged in the same way your other debts can be discharged. However, this does not preclude the government from opposing your discharge and requesting that matter be brought before the courts and requesting a conditional order of discharge that would reflect repayment a dollar amount that would reflect the value of the education that the government paid for, at least in part. The courts after hearing the facts do not automatically grant a conditional order of discharge but will try to resolve the issue in a manner that is both fair to you and the creditor. When discussing this matter with your trustee in bankruptcy you may wish to provide the details of your situation so that the trustee in bankruptcy can properly assess the situation.