Retention of Cash When Filing For Bankruptcy

December 1st, 2011 by Questions

I lost a well-paying job several months ago and have little prospect of gaining meaningful employment anytime soon. I have been maintaining monthly interest payments on approximately $150K in credit card debt from my savings but realize that I have no hope of ever paying this off so I am contemplating bankruptcy. My only income is Employment Insurance and I have never been bankrupt before, so I would probably be a nine bankrupt. My monthly expenses are approximately $1K more than my Employment Insurance income and I have been making up the difference from my savings. Assuming my monthly expenses are reasonable, would the trustee let me keep $9K from my savings to make up the deficiency I will experience during the nine months before using the balance to pay creditors?

Posted from: Ontario


One Response to “Retention of Cash When Filing For Bankruptcy”

, A licensed trustee said:

Unfortunately, there are no provisions under the law to allow you to keep $9,000 in order to pay your on-going living expenses.

Likely what a trustee will tell you is to adjust your living expenses to match your income (even if it is only EI) and then file for bankruptcy. If, as you say, you have little prospect of meanigful employment anytime soon, the sooner you reduce your living expnses the better off you will be. This may sound harsh, but imagine how your creditors feel about losing $150,000…

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