How often are debts contested in Bankruptcy?
October 29th, 2010 by Questions
I was wondering how often a debt/debts to creditors are contested during the bankruptcy process? I see that it can happen during a consumer proposal since their is a vote, but how does this work during bankruptcy?
For example, if I lost everything I own due to a failing business and the majority of my debts are unsecured, do those types of debt often get contested when bankruptcy is filed? Or since they are unsecured, do creditors just accept the bankruptcy? Assuming nothing suspicious is found with spending patters ovcourse.
Also, with a business lease that is personally guaranteed, do leases often get contested by the landlord if both then business and person goes bankrupt? Since the landlord can just take their property back and re-lease it to someone else, just curious as to how often problems can arise in these situations?
Any information would be greatly appreciated.
Posted from: Ontario
One Response to “How often are debts contested in Bankruptcy?”
Please post a follow up comment below:
(Note: comments are reviewed by moderators and then posted after approval. In addition, due to high volume some of the comments might not be posted.)
You must be logged in to post a comment.
October 30, 2010 at 9:53 am, Barton Goth - Goth & Company Inc. -Trustee in Bankruptcy said:
As long as you have not done anything that appears to be suspicios (i.e. significant use of credit on the eve of bankruptcy) then a debt is rarely contested when a bankruptcy
or a consumer proposal is filed. The situations we have problems are where people have done something inappropriate to maximize the amount of debt that is going to be cleared by the bankruptcy or tried to organize their assets to the detriment of their creditors. If you haven’t been involved in any of this I wouldn’t worry, just contact a local trustee, explain the situation, ask them if they see anything that would put you at risk of any difficulties and they will be able to help put your mind at ease.