almost 3000000 in unsecured debt

February 28th, 2010 by Questions

my friend owes 300,000 in unsecured debt but fears filing bankruptcy because of how long the bankruptcy will take. Does the length of bankruptcy increase with the amount of debt?

Posted from: Ontario


One Response to “almost 3000000 in unsecured debt”

, A licensed trustee said:

The short answer is no, the amoutn of debt has no direct impact on the duration (or cost) of filing for bankruptcy in Canada.

Having said that, the average person that files for bankruptcy has about $55,000 in unsecured debts. The fact that your friedn has so much more debt that the average person will be investigated. Depending on how the debt was accumulated, it may have an impact on the process and the cost.

For example, if your firend owes $300,000 in income taxes becuase they didn’t file (and therefore didn’t pay) they’ll have to appear in Court and explain their conduct.

If your friend has a gambling problem then they’ll have to prove to the Court that they have received (and continue to receive) treatment – the Court won’t discharge someone if they think there is a high probability they underlying cause of the bankruptcy has not been addressed.

If your friedn was sued by some one and the $300,000 is a judgment against them then the person that sued your friend has the ability to make the bankruptcy more complicated (and therefore longer and more costly).

So, the short answer is no, but depending on the circumstances surrounding your friend’s troubles, that answer might change.

Please post a follow up comment below:

(Note: comments are reviewed by moderators and then posted after approval. In addition, due to high volume some of the comments might not be posted.)