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If you have unsecured debt of under $10,000 and live in the Province of Ontario filing bankruptcy may not be the best option for you. We suggest you contact the Office of the Superintendent of Bankruptcy at 416-973-6441 to discuss your options, or you can visit their website here.

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Pre-proposal or bankruptcy spending

I`ve been reading here for a bit, trying to sort out what I`m going to do with my situation. I have about 60K in unsecured debt on credit lines. At this time, I`m not behind on payments, but I`m just getting nowhere with them.

The main cause for my problems has been loss of work in 2007, and then two vehicles that were both big financial drains (lost about 10K on both). Moving forward, I think I`m best getting into a new car (lease) so as to avoid repair costs for 4 years, and have a set amount to pay each year. A car is essential for me for work.

My question – If I end up dipping into my current credit to put a downpayment on the car (to keep lease payment affordable) will that become an issue if I file a proposal?

Thanks,

Bill

Posted from: Ontario

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One Response to “Pre-proposal or bankruptcy spending”

Barton Goth – Goth & Company Inc. -Trustee in Bankruptcy said...

This type of action would be inappropriate and likely cause you significant problems during the bankruptcy. It is not proper to increase your level of unsecured debt with the intent of simply filing a bankruptcy and it is clearly prejudicial to the rights of your creditors.

Once you know the filing of a bankruptcy is inevitable you should stop using any of your credit cards. Failure to do so will likely result in an opposition to your discharge, which would result in the court having to determine if what happened was proper, and in this kind of situation they would likely impose some type of penalty for an action of this nature.

You would be much better off to simply put nothing or very little down, and make sure that any deposit you leave comes from cash on hand and is not tied to any of your loans or credit cards in any way.