U.S./Canada debt, unemployed in Ontario

July 18th, 2008 by Questions

I am a Canadian, working & living in the U.S.

I am likely going to lose my U.S. job in the next few months…due to a disability.

I have a $150K Line of Credit and $5000 limit Visa with one Canadian bank. I also have a $8000 U.S. bank car loan.

(1) Can I pay off my $8K U.S. car loan with money from my Cdn line of credit, so I have no outstanding loans in the U.S., then file bankruptcy in Canada? Or is this considered fraudulent?

I am planning to move back to Ontario & am apply for disability benefits. If I`m unemployed in Canada and likely `creditor proof` and probably able to convince family to pay for the bankruptcy costs (if less than $400/mo), what are the advantages of filing for bankruptcy while unemployed/disabled? (vs later if I secure employment)

Thanks for your help.

Posted from: Ontario


One Response to “U.S./Canada debt, unemployed in Ontario”

, Barton Goth - Goth & Company Inc. - Bankruptcy Trustees said:

This is quite an involved question and one you will have to discuss directly with a local trustee to have everything covered, but here are the most important things you should know.

First, do not get involved with anything similar to what you outlined in (1). You are correct that this could be very easily considered fraudulent and would likely prevent you from being discharged in any timely fashion. As soon as you are looking for a way to arrange your finances in a way that would allow you to maximize the debts covered and the assets protected to the detriment of one or more of your creditors you are walking in very dangerous territory that you are much better to simply avoid.

In terms of filing when unemployed, the only real advantage is one of cost. If you have limited income, you will qualify for the minimum cost of a bankruptcy and not have to worry about paying any surplus, so at the end of the day if you are unemployed a bankruptcy would likely be cheaper than if employed.

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