Living on Credit

January 11th, 2011 by Questions

I own a business and my wife lost her job a few months ago. As such, we have been basically living on credit since the business is not making any money. Is this going to cause a problem with bankruptcy? We were trying to get the business profitable, but it just isn\’t working out. Any information would be great.

Posted from: Ontario


One Response to “Living on Credit”

, A licensed trustee said:

Here’s the problem – you cannot (well should not) continue to use credit or accumulate debt if you know that you do not have the ability to repay the debt. So, if you have come to the conclusion you aren’t going to be able to repay what you have borrowed so far then at the very least you have to stop borrowing more.

You’ll want to explain all of this in detail to your trustee BEFORE you decide to file so they can explain how it may impact on the length and cost of your bankruptcy. If you are still using credit in the three months before you file then it is quite likely you will be requried to repay some of that money as part of your bankruptcy.

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