If Service Canada believes that you received more employment insurance (“EI”) benefits than you were entitled to it will attempt to collect that overpayment back from you.
“any debt or liability resulting from obtaining property or services by false pretences or fraudulent misrepresentation, other than a debt or liability that arises from an equity claim” is not released by a consumer proposal or bankruptcy.
If you make an assignment in bankruptcy, or consumer proposal and complete the process, Service Canada may take the position that your EI overpayment survived the bankruptcy or consumer proposal. This may result in them garnishing your wages or taking other collection action. At this point, it would be up to you to seek judgment from the court that your EI overpayment was not received due to false pretences or fraudulent misrepresentation, and that it was in fact erased by your bankruptcy or consumer proposal. This process is time consuming and costly, which is why we do not recommend bankruptcy or consumer proposals to individuals whose main debt relates to an EI overpayment.
That said, if your EI overpayment is only a fraction of your total debt, then bankruptcy or a consumer proposal may be right for you. There is a chance that the Government will consider your debt extinguished and cease collection efforts.
If your debt is weighing on you, then give us a call to have your situation reviewed by a licensed Trustee in Bankruptcy for free. We have six convenient locations and never charge up front fees. Give us a call, or fill out our contact form below and let us impress you with our prompt response.