Are CERB Repayments Included in Bankruptcy?

Bankruptcy: Will It Cover CERB Repayments?

The uncertainty brought by the global pandemic led to the introduction of the Canada Emergency Response Benefit (CERB), providing financial relief to many Canadians. However, several individuals are now facing the daunting task of repaying these benefits, leading to the crucial question, Are CERB Repayments Included in Bankruptcy?

The CERB Repayment Demand

In recent times, numerous Canadians have been receiving collection letters from the Canada Revenue Agency (CRA), requesting the repayment of CERB. This unexpected financial burden has left many wondering why they are being asked to repay and how they can manage it. Additionally, some are curious whether this debt can be mitigated via a Consumer Proposal or Bankruptcy filing.

Reasons for CERB Repayment

Let’s delve into why some individuals might have to repay the CERB.

One of the primary reasons could be an error in income calculation. Some applicants could have misunderstood the eligibility criteria related to income, leading to receipt of benefits without qualifying for them. This confusion could occur if you applied with your gross income instead of net income, or included certain types of income that should not be part of your calculation.

The following types of income should not contribute to your eligibility:


  • Canada Child Benefit (CCB);
  • Social Assistance/disability;
  • Pension income;
  • Student loans and bursaries;
  • Spousal/child support;
  • Employment Insurance (EI), and
  • Investment income.

Even if you have these incomes, they should not affect your eligibility, provided you meet all other criteria and your job loss was due to COVID-19.

There may be other reasons for repayment demands. For instance, if you earned more income than anticipated during that period, you might have to repay CERB. This could occur if you received retroactive pay or returned to work earlier than expected.

Another common reason is that some Canadians applied for CERB through both the Canada Revenue Agency and Service Canada. Despite being allowed to receive benefits from only one of these institutions, some got benefits from both, leading to repayment demands from the CRA.

Repaying CERB: Your Options

If you’ve received a collection letter, it’s important to know your repayment options.

You can pay back the full amount to the CRA or Service Canada, depending on where you initially applied. However, for many, this sudden expense is not manageable in a single payment. In such cases, communicating directly with the CRA can help establish a payment plan that allows you to settle your debt over time.

If you’re a student who has been asked to repay CERB, you might be eligible for a credit towards this debt. Check your eligibility on the Government of Canada website and submit the necessary forms and documents to the CRA.

Should you find yourself unable to repay CERB and are dealing with other debts, consulting a Licensed Insolvency Trustee (LIT) could be beneficial. They can provide financial advice and help you explore options, including filing a Bankruptcy or Consumer Proposal.

Bankruptcy and CERB Debt

When considering legal measures like Bankruptcy or a Consumer Proposal, you might wonder if CERB debt would be discharged at the completion of these processes.

Generally, CERB debt is considered dischargeable under most circumstances, even if the payments were mistakenly received. As per Section 178 of the Bankruptcy and Insolvency Act, most debts, including CERB, are not listed as exceptions. However, if CERB payments were obtained fraudulently or through misrepresentation, they might not be discharged.

Seeking Aid for CERB Repayment

If financial worries are keeping you up at night, it’s time to take action. At Derek L. Chase & Associates, we offer a free initial assessment where we analyze your finances and present you with viable options. This confidential appointment is designed to provide you with a fresh financial start.

In conclusion, Are CERB Repayments Included in Bankruptcy? Yes, in most cases. However, it’s always best to consult a professional to understand your unique situation and navigate the best possible solution.

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