Cannot afford to go bankrupt

A friend has no money, no job and has lost everything. He is on social assistance and disability. He should go bankrupt but has no money or assests that can be used to pay a trustee. Is there any assistance available in this typre of situation.

Posted from: British Columbia

One Response to “Cannot afford to go bankrupt”

A licensed trustee said...

There is not. The government operates something called the Bankruptcy Assistance Progarm, but it does not provide free bankruptcy services. The program requires a person to prove that they have asked at least 2 trustees to take on their case and if they refuse, the government then assigns the file to a trustee. Unfortunately, that trustee will still require payment.

It costs roughly $1000 in out of pocket expenses, including paying staff, to complete a basic personal bankruptcy. The base fee paid to a trustee is $975 – if a trustee receives anything less than that then the trustee is not only not making any moeny themselves, they are actually losing money. It is not likely to happen…

If your firend is on social assistance and disability then they are what the industry terms “creditor proof”. They can be sued by their creditors, but a Court will not allow the garnishee of social assistance or a disability pension. In other words, the bankruptcy provides relief from the calls, but no real additional protection from the debt.

This will seem harsh, but if your friend wants relief from the creditors’ calls then they’ll need to find a way to pay for the service. Most people change or even disconnect their phone.