mutual funds
I am considering bankruptcy. I cashed in my (self-directed) mutual funds about two months ago to repay my friends and family who I owe money to, but there is no way I can meet my cost of living and payments to creditors at this time. But a friend in finance tells me that my cashing in mutual funds may be suspicious. Will I be expected to come up with all that money if I file for bankruptcy? Or to ask my family for it back? help?!
Posted from: Ontario
It is not the cashing in of the mutual funds that is the problem, it is the paying off the friends and and family that is the problem This is termed a fraudulent preference as you have improperly chosen to pay select creditors and not given the same treatment to all of your creditors. This violates the intention of the Bankruptcy and Insolvency Act as the mandate of this legislation is to ensure that the creditors are treated in a fair and equal manner. So what will likely happen if you file a bankruptcy is that either you or the people you paid back will be ordered by the court to pay this same amount of money into the trustee’s office so that it can be distributed equally to all your creditors.