Bankruptcy or give up?

December 12th, 2009 by Questions

My husband is 70 and retired. He just got let go from his part time job. He is 40,000.00 in debt by 2 credit card co.`s. (20,000.00 each). He cannot pay off his debts. He has no assets. He will never work again because of his age and health. He has arthritis and bad hips. I, his wife am not working either. I am 61 so am not entitled to pension yet. We are renting and just own old furniture. My question is. Would it be better for him to just inform the credit card co`s he cannot pay and let it go to collections and deal with the phone calls but eventually hoping the credit card co`s will write off the debt? Otherwise we don`t even have enough money to claim bankruptcy. I own an old car and van but that`s it.
Thank you

Posted from: Ontario


One Response to “Bankruptcy or give up?”

, A licensed trustee said:

Your husband is something people in the industry call “creditor proof” – that means if he decides to stop making the payments on his unsecured debts (his credit cards) there is very little that his creditors can do. The may continue to call, they may even take him to Court, but at the end of the day if his only income is from a pension then the Court cannot allow a garnishee from pension income.

As to whether or not he should stop paying, that is a personal decision he has to make. In my expereicne most of the people in his generation are uncomfortable with the idea of not dealing with their debts. You’ll need to finda way to present this idea to him that won’t offend his sense of honour.

Bankruptcy is an option, but I know in our own practice we’ll only accept a file like your husband’s after we’ve discussed being “creditor proof” – in that way your husband can make an informed decision if the cost of filing for bankruptcy is money well spent (or not).

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