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If you have unsecured debt of under $10,000 and live in the Province of Ontario filing bankruptcy may not be the best option for you. We suggest you contact the Office of the Superintendent of Bankruptcy at 416-973-6441 to discuss your options, or you can visit their website here.

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Is Bankruptcy the answer for young woman?

(Manitoba)

My daughter is 21 years of age and over the last 5 years she has amassed about fifteen thousand dollars of debt. Most monies are owed to Autopac (uninsured accident), a mail-order book club and cell phone usage. All of her debts are at least two years old and are increasing due to interest and other charges.

For the last six months she has held a regular full time job paying about ten dollars an hour. She has never made a payment to the agencies trying to collect. There is no way that she can pay this debt and she cannot get on with her life because of the debt. She has a common law spouse who has advised her against filing for bankruptcy. He says they will take almost every dollar she makes for several years and then have further credit problems later. Her spouse has a few thousand of his own debt but has been gradually repaying and feels that he will be able to repay it eventually. He also has had a full time job for the last six months, earning approximately fifteen dollars an hour.

I do not like to advise my daughter as I am not familiar with bankruptcy at all, although to me it seems like the only way out of this mess. Does she seems like a likely candidate and what could she expect? Obviously she does not have any money to spend for advice.

Thanks so much for your assistance.

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One Response to “Is Bankruptcy the answer for young woman?”

Barton Goth, GCO Inc. Bankruptcy Trustees said...

She does seem like a candidate for bankruptcy, and indirectly it sounds as if it would help her to fully rebuild her credit on a quicker basis than by making payments in full. However, it is very possible that she may be better off filing a consumer proposal. As I don’t have sufficient detail to give any concrete suggestions I would suggest you contact a licensed trustee to review the specifics in your area to determine which direction may be best

In a bankruptcy, while there are small variations across the country, if your daughter filed I wouldn’t expect that her bankruptcy would last any longer than 12 months and often the cost can be as little as $150.00 per month. This amount can fluctuate as it is dependent on the total household net income, the number of people residing in the household, and your daughter’s percentage of the household income, so it would be important to review this information in advance with the trustee.