non-economic loss cheque from WSIB claim
July 16th, 2015 by Questions
I am in the middle of a 2nd bankruptcy, last expense form I will fill out is Aug 2015. I just received a non-economic loss cheque from WSIB claim for a permanent impairment to my hands. “Do I have to report this on my income statement to the trustee?”
I ask because it did state on your website that a Non-economic loss does not have to be declared. But I may have taken it out of context so I want to double check. I also read that some disability payments are exempt from income. I am so worried that this cheque will put me into a surplus income and will, in turn, extend my bankruptcy. I was also just recently in a major car accident and could use the money. I am afraid to cash and spend it for fear of owing the money to a creditor.
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July 20, 2015 at 6:21 am, Doug Stuive, CA | Trustee | CIRP said:
Trustee’s are licensed by the federal government and adhere to a strict code of conduct. They also have to follow the Bankruptcy and Insolvency Act. A trustee is not going to take your funds if they are not entitled to them. But as a bankrupt you have a responsibility to disclose all sources of income you receive to your trustee- that is one of the duties of bankruptcy. If you receive these funds and do not report them you would be subject to an opposition to your discharge from bankruptcy because you did not fulfill your duties. You do have an obligation to report these earnings to your Trustee.
When you disclose the income amount it is also recommended that you send along any documentation that you received from WSIB about the nature of your Non-economic loss. The reason why you received the funds will help determine whether the funds will form part of your bankruptcy estate in any way. For example, an award of money due to pain and suffering generally would not form part of a bankruptcy proceedings, whereas awards for loss of wages generally will have to be paid to the bankruptcy estate in some capacity.
The other thing you have to remember is one lump sum payout will not usually put you into a 36 month bankruptcy. If you will continue to have income below the guideline each month on a go forward basis they will not extend your bankruptcy. It may be that you will have to forfeit a portion of the funds you received from WSIB but once you do that you should still be able to receive an automatic discharge from your bankruptcy provided you’ve met the other criteria.