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ARTICLE · 21 DECEMBER 2015

Who Gets Paid In An Insolvent Estate?

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Some individuals are appointed as Estate Trustees and, after determining the debts owed by the Estate, discover that the Estate does not have enough money to pay its creditors leaving the Estate Trustee to question who should get paid.

CanadaInsolvency/Bankruptcy/Re-Structuring
David G. Waites
David G. Waites
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Some individuals are appointed as Estate Trustees and, after determining the debts owed by the Estate, discover that the Estate does not have enough money to pay its creditors leaving the Estate Trustee to question who should get paid.

There are laws regarding who is entitled to be paid first when an estate is insolvent (unable to pay all of its debts). An Estate Trustee of an insolvent estate must decide whether to administer the estate as an insolvent estate, or to place the estate into bankruptcy. In either case, the Estate Trustee must determine the priority of payment, as the failure to pay creditors in the proper order could result in personal liability to the trustee.

If the estate is administered simply as an insolvent estate, the order of payment is:

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