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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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Bankruptcy and credit insurance

I have credit card debt and am currently unemployed. I have difficulty keeping up with the payments and I will be declaring bankruptcy if I don’t get a job soon.

Part of the credit card debt is covered by credit insurance which pays the minimum payment every month directly to the credit card company. I’am unable to make the minimum payments on the rest of the debt.

If I declare bankruptcy will the loans on which I have insurance be treated differently from the loans that I don’t have insurance on?

If I declare bankruptcy will the insurance companies be forced to pay the trustee instead of the credit card company?

Hypothetically , if I were to still remain unemployed after the discharge , should the credit card company issue a credit to me for the payments made by the insurance company since I do not owe them anything?

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One Response to “Bankruptcy and credit insurance”

A licensed trustee said...

In my experience, these insured loans are treated the same as any other debt. Your trustee will be required to notify the creditor your bankruptcy and the insurance will cease as of that date – if you don’t have an obligation to pay due to your bankruptcy then your insurance no longer has an obligation to pay either,