Left my job to go back to school

February 28th, 2007 by Questions

I owe about $60k on my credit cards and loans. I left my job three months ago to go back to school part-time, because I didn’t enjoy the work environment. My employer had no problems with my performance. The other part of my time I’ve spent doing personal things, including visiting the U.S. for two weeks to take another course.

I had intended to use 5k from my RRSP to fund part of the time off, but my expenses have been higher than I anticipated (I needed to purchase a new $2500 computer for my course work.) I haven’t taken money out of my RRSP yet.

I intend to go back to work a few months from now once I’ve completed another two courses, and there’s a good chance I’ll have to file a consumer proposal when I do. I’ve been holding off on filing the proposal until I return to work, so I’ll have enough monthly income to make a proposal instead of declaring bankruptcy. However, my debt continues to increase.

If I can’t afford my bills even after going back to work, will the bank view this as fraud? What do you think I should do?


One Response to “Left my job to go back to school”

, A licensed trustee said:

The bank (and society in general) will consider it fraud if you’ve been increasing your debt load since you quit your job knowing that when you return to work you will file a proposal or bankruptcy.

If you haven’t increased your debt load (ie used up whatever room was left on your credit and/or applied for new credit) then the bank isn’t any worse off than they were before you quit – with the amount of debt you are carrying you may have had to file a proposal or bankruptcy anyway (even if you had kept working).

Only you know your true intent – have you been deliberately using up your credit? If you have, well, that sounds like fraud to me…

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