Good Faith

April 22nd, 2009 by Questions

Let me apologize in advance for the complicated question. I am worried I might not be released from bankruptcy if I declare, and I am having trouble describing my situation.

In June 2004 I lost my full-time job (I earned $32,000 in 2004) and couldn`t pay my credit card bills. I owed a little over $20,000 and I just stopped paying. My debt was passed on to collection agencies. My income has been quite low since 2004 (below $20,000 each year). One colletion agency has a judgment against me for $8,000 (it is just a little less than that now as the amount garnished from my paycheque barely covers interest), but the other agencies have stopped calling.

I also have $60,000 in student loan debt and it has been 8 years since I have attended university (I haven`t taken any courses since May 2001). My student loan payments have recently increased from a reduced payment to almost double, and I am 3 months behind in payments. I won`t be able to make the minimum payment on my credit card for a second month (I owe $2500).

I would like to declare bankruptcy, but I am afraid my not paying in 2004 would be considered a lack of good faith. Do I have to disclose these debts (I have recently found out that they are statute barred, although they still appear on my equifax credit report) or would not disclosing them be considered fraud?

Posted from: Ontario


One Response to “Good Faith”

, Barton Goth - Goth & Company Inc. -Trustee in Bankruptcy said:

Rest assured, not making payment in 2004 will not have any impact on you being eligible to declare or be discharged from bankruptcy.

As for the debts that occurred back in 2004, they must be listed, and may not actually be statute bared. The rules around the legislation that results in debts being statute bared is quite complex and permits many actions that a creditor can take ot have the debt prevented from being statuted bared), but regardless the best thing to do is to simply list those debts and then you never have to worry about them.

At this point you are best to contact a local trustee and they will be able to go into more depth concerning the good faith issue, but from the sounds of it you have not been involved in any action that would make you in-eligible for discharge.

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