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DEBT RELIEF IN CANADA: BANKRUPTCY COURT SALUTES CANADIAN MILITARY VETERAN - YouTube
Channel: Ira Smith
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DEBT RELIEF IN CANADA: BANKRUPTCY COURT SALUTES
CANADIAN MILITARY VETERAN
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I recently read a decision of the Bankruptcy
Registrar of the Supreme Court of Nova Scotia
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in Bankruptcy and Insolvency that really inspired
me.
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It got me thinking about the sacrifices our
men and women in the military make for all
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Canadians.
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This particular Court decision, also made
me think of sometimes they need our help for
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debt relief in Canada.
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The decision on this case was released August
31, 2018.
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The first two paragraphs of the Registrar’s
decision, I found especially poignant:
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“[1] This Court routinely considers situations
in which the Bankrupt is indebted to the people
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of Canada, through tax or other liabilities
to the State.
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As a matter of general policy, these obligations
have a higher moral and sometimes legal priority
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than to private creditors as they are borne
by all of us, as citizens and fellows of Society;
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and because the public generally must bear
the share not paid by someone else.
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The collective public is an involuntary creditor
in the result.
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[2] What, then, is the situation when that
is reversed – when it is the people of Canada
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who are indebted to the individual?
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Should compensation paid out as a consequence
be considered divisible among creditors in
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an insolvency?”
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Master Corporal Durdle was a career soldier.
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He spent 24 years in the military, retiring
at the age of 45 years old.
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He is now 49 years old and suffers from military
service induced post traumatic stress disorder.
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He remains under professional care.
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He is in need of debt relief.
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On November 13, 2013, Master Corporal Durdle
filed an assignment in bankruptcy.
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This is his second bankruptcy and therefore,
was not entitled to an automatic discharge
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from bankruptcy.
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The purpose of the Court hearing was for the
Court to consider what form of bankruptcy
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discharge he should be entitled to.
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In this second bankruptcy, there were minimal
non-exempt assets and unsecured creditors
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totalling $73,476.76.
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In 2014 while an undischarged bankrupt, Master
Corporal Durdle received taxable income, including:
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$16,778 from a wage loss replacement plan;
A rehiring allowance of $28,107.04, including
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$19,675 in severance pay;
Pension income of $23,594.10;
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Disability income of $49,289; and
$3,624 in employment income.
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The decision the Court had to make was, as
the guidelines existed in 2014, how much if
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any of this 2014 taxable income should be
considered surplus income?
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The Registrar made a point of saying:
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“I wish to be clear that nothing should
be taken as putting
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military debtors on a different footing than
a civilian.
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The rule of law,
including that of civil contract, is one of
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the core values we hold as
Canadians, and which is protected by our men
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and women in uniform.
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What is, however, on a different footing is
the debt we owe those men
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and women when they are injured or ill in
the discharge of those
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Duties.”
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The Registrar went through a very thoughtful
analysis of the law and considered it in connection
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with the various types of 2014 taxable income.
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1.
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The wage loss replacement plan - Wrongful
termination awards would normally be included
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in total income, as would pay in lieu of notice.
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The Registrar however went on to comment that
in this case, the wage loss replacement plan
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was not termination pay or pay in lieu of
notice but rather, pay because Master Corporal
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Durdle’s PTSD prevented him to continue
serving.
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The Registrar concluded that this amount should
not be considered as income and this amount
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should not be included in the calculation
of surplus income.
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2.
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The rehiring allowance - The Registrar applied
the same logic in deciding that this payment
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should not be included in the calculation
of surplus income.
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He decided that this payment was a result
of Master Corporal Durdle’s PTSD preventing
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him from continuing to serve in the military.
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3.
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Pension income - The Registrar could not determine
whether this income was solely a benefit due
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to Master Corporal Durdle’s PTSD or not.
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However, it did factor into the Registrar’s
ruling.
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4.
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Disability income - The Registrar considered
this income in light of previous Court decisions
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involving lump sum awards, especially under
a Workers’ Compensation Plan.
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The Registrar went on to review the actual
Federal statute under which the payment was
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made to him, the Veterans Well-being Act.
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The Registrar concluded that this amount would
not be included in the calculation of surplus
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income.
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5.
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Employment income - The Registrar concluded
that this amount is included in the surplus
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income calculation.
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The Registrar concluded that if he includes
the pension income and of course the employment
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income, less statutory deductions, Master
Corporal Durdle’s income which must be considered
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for surplus income, falls under the Superintendent
of Bankruptcy threshold for 2014.
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Accordingly, Master Corporal Durdle had no
surplus income to pay when considering Section
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68 of the BIA.
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Since this was Master Corporal Durdle’s
second bankruptcy, he was not entitled to
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an absolute discharge.
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Therefore, the Registrar did not impose any
conditions on his discharge, but rather, suspended
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his discharge for one day.
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The Registrar was obviously moved by Master
Corporal Durdle’s service to Canada and
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of his current plight brought on by service
related PTSD.
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The Registrar followed the law and also showed
his understanding and kindness of this sad
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situation.
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If you have financial difficulties, whether
brought on by a medical cause or for any other
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reason, you need to seek professional advice
from a Firm that will show you the understanding
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and kindness you deserve.
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The Ira Smith Trustee Team has seen many cases
of personal and corporate financial distress.
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We understand your pain and we know how to
alleviate it; with understanding and kindness.
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Our strategy for every single business and
person is to develop a result where Starting
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Over, Starting Now comes true, starting the
minute you walk through our door.
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You’re just one call away from taking the
necessary actions to get your debt settlement
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and back on the road to leading a healthy
and stress-free life.
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Contact
the Ira Smith Team today.
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