Bankruptcy Court

March 7th, 2006 by Questions

I have a question about the Courts in Canada . I have been out of work for more than a year . The credit card companies in which I have credit are threatening to take me to court.One has already served me papers.I have a court date four weeks from now .I don’t have any kind of defence,I do owe the money.I cannot pay the amount because I am out of work.Do I have to go to court .I am embarrased about my finances but my hands are tied .If I were to declare bankruptcy would I have to go to court? Do I get in trouble if I don’t attend this hearing my creditor has requested . I wouldn’t want to be picked up by the police if I didn’t attend .My situation is not of any type of fraud or anything like that .I just can’t find work.I hope somebody who knows can reply to my post .


One Response to “Bankruptcy Court”

, A licensed trustee said:

You are not alone – at any time there are thousands of Canadians out of work and therefore unable to pay their bills. Until they (you) find work there’s not much you can do about it.

In regards to Court – you are not required to attend or even respond to a lawsuit, BUT if you don’t respond then the party suing you will be granted a default judgment against you. Basically that means the Court will agree fully with the person that was suing you and issue an Order to that affect. Once someone has such an Order they may apply to the Court to garnishee your wages.

Of course, you started this question by telling us you are out of work so the garnishment won’t apply to you until you return to work. As soon as you do return to work, the person that sued you could serve the Order to garnishee on your new employer.

Your second question was what would happen if you filed bankruptcy? If you file before the lawsuit is started then the lawsuit cannot be started. If the lawsuit has already commenced it will be stopped. If the other party already has an Order against you the Order is “stayed” (which means it can’t be used). There are ways around this depending on how your debt was incurred (you mentioned fraud in your comments), but in most cases the matter is stopped completely.

You may want to use the links to find a trustee in your area to discuss your situation and options more fully. It is usually better to discuss your options before people start taking you to Court.

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