trustee advice
I went to a trustee to get advice. I thought declaring bankrupcy would give me relief from the constant calls, letters and having to go to court.I will never be able to pay my huge debt. I explained to the trustee my situation. I owe 45,000 and my income is 700/ month for the rest of my life. .He told me that I could not afford to go bankrupt. Then he tells me that his firm would not handle my bankruptcy.He estimated the fees for handling my bankrutcy would be around 6,500. After I pay my rent there is about 200 /month left for food,utilities etc.Should I believe this man that I can’t afford to go bankrupt? It seems whacky to me but maybe it is true. Should I try another Trustee or will I get the same answer. Thank you
I agree with your trustee. Bankruptcy eliminates your debts, but it is also designed to prevent your creditors from garnisheeing your wages. Since you are retired and have no wages, it may not make sense to make a payment to the trustee each month, and lose your tax refund, simply to stop the phone from ringing.
If you decide not to go bankrupt, which is probably the correct decision, I would advise you to open a new bank account at a new bank (where you don’t owe any money) to prevent your bank from automatically taking a payment from your account.
In your case you probably should contact a licensed trustee for a second opinion.
Most trustees in Canada require a minimum payment of approximately $1,500 over the course of a nine month bankruptcy. In addition you lose tax refunds, GST credits and assets (such as certain RRSPS) which may be why the trustee told you the bankruptcy would cost $6,500.
Since you are on a fixed income, it is doubtful that the creditors will attempt to garnishee your income, so the trustee is probably correct in saying that you do not require the protection of a bankruptcy.