IFSE Institute Exam LLQP Topic 2 Question 9 Discussion

Actual exam question for IFSE Institute's LLQP exam

Question #: 9
Topic #: 2

Paola, an employee at Horizon Pharmaceuticals, was recently diagnosed with depression. She is unable to work and is receiving tax-free disability insurance benefits due to her condition. Paola is deeply indebted, and her creditors have been garnishing a portion of her pay for the last year. She is worried about her creditors also garnishing her disability benefit.

Can her disability benefits be seized by her creditors?

AYes, disability insurance benefits are seizable.

BYes, but creditors can only seize up to 50% of her benefit.

CNo, because the benefits are tax-free.

DNo, because she is disabled.

Show Suggested Answer

Suggested Answer: D

In Quebec, disability insurance benefits that replace income due to a disability are generally exempt from seizure by creditors. This protection exists to ensure that individuals who are unable to work due to disability can still cover their basic needs without creditor interference. The tax-free status of the benefits does not directly impact their seizure exemption. Therefore, Paola's disability insurance benefits are protected from garnishment due to her disability, as stipulated by Quebec's insurance and creditor protection laws.

by Cammy at Jan 12, 2025, 07:27 PM

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12 days ago

I think her disability benefits can be seized.

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