CERB Overpayments – Discharge with bankruptcy or consumer proposal
The following is a Guidance to Licensed Insolvency Trustees dated March 25th 2022 from the Office of the Superintendent of Bankruptcy’s website:
The Government of Canada is beginning to recover Canada Emergency Response Benefit (CERB) where it has been determined that it was paid erroneously or was an overpayment. The Office of the Superintendent of Bankruptcy (OSB) is confirming to Licensed Insolvency Trustees (LIT) that erroneous or overpayment of CERB are provable claims in bankruptcy.
Erroneous or overpayment of CERB is a releasable debt in the event of an insolvency given that it is to be treated as a debt owed to the Crown pursuant to subsection 12(2) of the Canada Emergency Response Benefit Act (CERBA). An erroneous or overpayment of CERB does not automatically constitute a debt that survives discharge under section 178 of the Bankruptcy and Insolvency Act (BIA) because any allegation made regarding section 178 of the BIA must be proven in accordance with the BIA. (See Re: Coyle.) Lastly, the claim provable date would be the date that the CERB payment was made to the insolvent person.
What this means is that a CERB overpayment can be included in a personal bankruptcy or consumer proposal proceeding.
If you’re unable to repay such an overpayment to the Government of Canada, please contact us and we can work with you to explore your options.
Victor Fong, CPA, Licensed Insolvency Trustee
Victor is the President of Fong and Partners Inc. He is a Licensed Insolvency Trustee and Chartered Professional Accountant. With over 20 years of experience in the insolvency field, Victor has been involved in both corporate and consumer insolvency engagements. Previously with a large national firm, Victor founded Fong and Partners Inc. in 2007 so that he could dedicate his professional life to help people from all walks of life to deal with their debt.
