Occasionally when I met with someone in Chatham, I refer to them as creditor proof. What does that mean?
Does it really mean I am protected from my creditors? Well, yes and no.
The main reason someone files for bankruptcy is to protect with wages or assets. If you don’t have any wages or assets, you have nothing to protect. Hence, the term creditor proof.
Does that mean I can’t be sued? No, you can still be sued. The difference is that even if you are sued there is little that can be done. You don’t have any wages that can be garnisheed and you don’t have any assets that can be seized.
However, these rules don’t apply to Canada Revenue Agency (formerly known as Revenue Canada). If you owe money to the government such as student loans or CMHC, they have the right to take your tax refunds and HST cheques until that debt is paid in full.
If you are in this situation, you really need to review the cost of filing for bankruptcy versus the benefits. For some the correct answer is to do nothing until you are back to work. For others, especially those with tax refunds that have been seized, it may be more beneficial to save up the money to file for bankruptcy to put an end to losing their tax refunds.
Contact me at 519-315-2323 or 310-PLAN if you have questions about bankruptcy or your debts.
About Rebecca Martyn is a bankruptcy trustee and consumer proposal administrator responsible for the Hoyes, Michalos & Associates office in Chatham, Ontario.
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