Claims by SGI in a Bankruptcy or Proposal

2009-04-13   minute read

Michelle Scheller

We are frequently asked if a claim by Saskatchewan Government Insurance will be released in a bankruptcy, or proposal. The short answer is yes, but there are some twists that require further explanation.

Person typing on a laptop

SGI assesses people who are uninsured for any reason if they are involved in an accident and cause damages. The assessment is not a court order for restitution, but is simply a determination by SGI as to the amount of the damages.

Assuming the individual accepts this assessment, then SGI requires that payments be made towards it or they will refuse to issue a drivers license to that person. If that person files bankruptcy the debt owing to SGI will be discharged at the end of the bankruptcy process but SGI takes the position that, until that discharge has happened, they will still require payments if the individual wants a drivers license.

Furthermore, SGI has taken to getting individuals to sign agreements acknowledging the debt and further agreeing that the debt will survive a bankruptcy or proposal. There are certain debts that do survive a bankruptcy that are set out in Section 178 of the Bankruptcy and Insolvency (Alimony, Child Support, Student Loans etc.) and SGI is having individuals agree that their debt to SGI falls in the category.

If a person has executed such an agreement SGI would have a very good argument that the debt would survive and we would recommend that an individual in such a case seek legal advice before proceeding.

As always, please do not hesitate to call us if you require further information or wish to discuss the above.

Consultation icon