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Small Debt Bankruptcy

My sister-in-law has moved in with us. Her husband ran up an overdraft of about$3000 on a joint bank account before being declared mentally incompetent and placed on disability and under the public trustee.
Now the bank are harassing her almost daily. She has no assets and no income other than $300 a month CPP and $300 welfare. She has no prospects for work as we live in the country and she has no car.
From what I gather here, it would cost her almost as much as the debt to go bankrupt. What should she do?

Posted from: Ontario

One Response to “Small Debt Bankruptcy”

A licensed trustee said...

Your sister-in-law is what we in the industry call “creditor proof”. Neither her CPP or welfare may be garnisheed by her creditors. She should switch to a new bank – one she is not indebted to – and then send all of her a creditors a registered letter that advises her sources of income and her request that they cease and desist their collection actions. Her creditors will either leave her alone or take her to Court. If they go to Court she needs to respond and attend – the Court will not allow her CPP or welfare to be garnisheed.