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Do I include credit cards without any balance ?

Im thinkin of doing a consumer proposal on my credit cards, do i have to include the one with no balance owing it has a small limit ? & also i have a small line of credit at my bank with nothing owed will i lose this also ? Thank you

Posted from: Ontario

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One Response to “Do I include credit cards without any balance ?”

Doug Stuive, CA | Trustee | CIRP said...

When you file a consumer proposal you are required to list all your accounts or debts on your statement of affairs. For accounts that have a zero balance they would be listed as contingent claims. That means that at the time of filing there was no known debt but should you be mistaken they would be considered part of the consumer proposal.

Both the issuer of your credit card and the bank that holds your line of credit would be notified that you filed a consumer proposal. At that time, it would be their decision to close your account or allow you to keep it open. It is likely that they would close your account.

Should they allow you keep your account open and you do build up a credit balance again you may run into issues. Often if a consumer proposal fails the only option is to file an assignment in bankruptcy. If new debt is accumulated during the proposal this may affect your ability to obtain an automatic discharge from your bankruptcy. In particular this would be a factor if the debt you accumulated during your proposal was a contributing factor in your ability to maintain the proposal payments.

Filing a consumer proposal is about financial rehabilitation and a fresh start. It is advisable that you live without credit during the better part of your consumer proposal and then focus on rebuilding.