Becoming Creditor-Proof
I am a senior and am considering a proposal or possibly bankruptcy. I am employed. My situation is such that I may have to leave my job in the near future (not for job-related reasons). If that happens, my only income will be CPP, OAS and supplement. What would happen if this occurred during a proposal or a bankruptcy? Someone told me that if that were the case, I’d be creditor-proof since my income could not be touched. Someone else told me that my bank accounts could/would be taken.
Creditor proof refers to having limited income that is coming from sources that can’t be seized by creditors (in the absence of a bankruptcy). Essentially what happens is that the creditors have no ability intercept monies directly from their source (i.e they cannot garnishee cpp or oas pensions) but they often still can seize bank accounts and you can expect the standard harassing phone calls for a period of time until they figure this out (how long is dependent on how committed the collection agent is, there is nothing forcing them to stop, but usually 6 months is a good estimate). This status has no application to an individual in the middle of a consumer proposal or a bankruptcy.