FILL OUT THE FORM BELOW AND RECEIVE A NO-OBLIGATION CONSULTATION

"*" indicates required fields

Name*

Phone Number*

Email*

This field is hidden when viewing the form

What's the best time to contact you?*

Location*

What city do you live in?*

Total Unsecured Debt*

*Unsecured debt includes credit cards, lines of credit, bank overdrafts, payday loans, and unsecured personal loans (excluding student loans). It does not include mortgages and car loans.

This field is hidden when viewing the form

Source

How can we help you?

If you have unsecured debt of under $10,000 and live in the Province of Ontario filing bankruptcy may not be the best option for you. We suggest you contact the Office of the Super Intendent of Bankruptcy at 416-973-6441 to discuss your options, or you can visit their website here.

Agreement*

I understand that Bankruptcy-Canada.ca does not provide debt relief services directly and agree to securely share this information with a local Licensed Insolvency Trustee (LIT) for a free, confidential consultation.

Phone

This field is for validation purposes and should be left unchanged.

Select Trustee By Province

Will my lump sum from severance pay affect my bankruptcy?

Good afternoon:
I am almost through the bankruptcy process…6 months left out of 21. Everything is going along fine and yesterday I get the news that the business I have worked at for 10 years is closing and I will receive severance pay. How drastically will receiving this lump sum affect my payments? Will this lump sum mean that I won’t be elligible to complete the process? I am worried.

Posted from: Ontario

Share this post:

X (Twitter) Facebook LinkedIn Email

One Response to “Will my lump sum from severance pay affect my bankruptcy?”

Doug Stuive, CA | Trustee | CIRP said...

Receiving a severance package as an undischarged bankrupt will definitely affect the amount you are required to pay into your bankruptcy estate in order to receive your automatic discharge in the 21 month period. As you are aware you are required to pay your required surplus income obligation in full and the amount required is based on your average earnings during this bankruptcy period. The details of the severance package will determine just how the payments will be affected.

Without more information it is difficult to determine just how much this will affect your required payments. It is recommended that you contact your trustee as soon as possible to set up an appointment to discuss your options. The trustee will need to know how much you are receiving in total, the pay out time frame for these funds, and the number of weeks of income the severance package represents. With this information your trustee can complete a surplus income calculation and can determine the affect this severance will have on your total payment obligation. Once this amount has been determined the trustee can work with you to set up a payment schedule and can discuss any options that may be available to ensure your discharge is not jeopardized.