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Recently we were contacted by a debtor who was in an unusual situation. The creditor was an insurance company who had commenced an action for the recovery of a claim due to “bodily harm” after an accident occurred and someone was injured. The debtor’s father was driving his car, but it was uninsured. The father had an accident and injured a pedestrian. The pedestrian’s insurance company sued the debtor as the owner of the car and claimed, among other things, bodily harm.

The debtor had done some research on the internet about the Bankruptcy and Insolvency Act of Canada (“the Act”) and knew there were debts that did not go away in either a bankruptcy or a consumer proposal and was very concerned.

Bankruptcy-And-Insolvency-ActSection 178 (1) of the Act outlines what debts survive any proceedings. In particular (a.1) states that “…any award of damages by a Court in a civil proceedings in respect of (i) bodily harm intentionally inflicted,……or (ii) wrongful death resulting therefrom;” were not forgiven.

Since the bodily harm was a result of an accident and not an intentional act, we were of the opinion that the debt would not survive under the Act. For one, it was an accident and an unfortunate set of circumstances where a stranger was hurt and secondly, the debtor was not the one driving the vehicle.

We suggested that if the debtor still wanted confirmation about the status of this debt, he should seek a legal opinion so he was absolutely certain where he stood.

We were able to give him the name of several insolvency lawyers, so that he was clear about his situation.

Then he would be ready to take the next steps knowing he would be able to make a fresh start and not having any lingering debt after filing a consumer proposal or a bankruptcy.

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