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Creditor Claims and Remedies Archives

Federal funds for laid-off workers increased

The federal Wage Earner Protection Program Act (WEPPA) provides funds for employees who go unpaid as a result of their employer's bankruptcy. or receivership This program is administered with the help of the trustee in bankruptcy or receiver (as the case may be).

Recovering the excess from net winners in a Ponzi scheme

Ponzi schemes are fraudulent investment schemes whereby individuals are enticed by a conman or fraudster to make investments in an operation promising an unreasonably high rate of return. Once the first few investments are made, subsequent investors are enticed to invest partly through reported gains and partly through the high payouts of earlier investors. Ultimately, the conman either spends or disappears with the remaining money, or the scheme collapses on itself as funds are exhausted by payouts to earlier investors. 

Resetting the limitations clock in actions to recover debts

The Supreme Court of British Columbia is the most recent court latest to find that a debtor's email can, in the appropriate circumstances, be sufficient to restart the two-year limitation period in which a creditor can initiate a court action to recover payment of a debt.

Deemed trust amounts

In the course of business a person, in compliance with various statutory obligations, may collect tax or withhold monies that are payable to federal or provincial governments. Examples of such collection or withholding are for provincial sales tax, goods and services tax and employee source deductions for income tax, employment insurance and Canada Pension Plan amounts.

When bankruptcy reshuffles the priority of creditors

Under ordinary circumstances, certain creditors enjoy a favoured standing in the realization pecking order. For example, federal and provincial legislation may create preferred rights in respect of debts such as collected but unremitted taxes and unpaid wages. However, once a debtor is bankrupt, a new hierarchy for creditors will govern.

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