Taking Credit 4 month before bankruptcy

May 14th, 2012 by Questions

Is it OK to pay other loans from newly opened line of credit. This way I will consolidate all credit accounts to one line of credit account and later file bankruptcy or consumer proposal?

Or it is against the law to take credit 3 /4 month before bankruptcy?

Posted from: Ontario


One Response to “Taking Credit 4 month before bankruptcy”

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

This would be a very bad idea. If you are likely going to have to file for bankruptcy, what you want to do is leave all your loans where they are. Don’t move things around, don’t consolidate any further. The problem this can cause is if you move all your loans to one institution prior to filing for bankruptcy, then this one institution will take the full loss on these debts. Further, they may be able to suggest you did this purposely, meaning you were trying to organize your finances in such a way that the institutions you prefer would not suffer any of the loss that would be caused by a bankruptcy. This last point is the most problematic as if this type of preference can be demonstrated you may not be eligible to be cleared from these debts. So the best advice… leave the accounts where they are!

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