Private Personal Loans

June 25th, 2008 by Questions

If you owe monies to family or friends, along with creditor debt, can you sell assets or redeem assets;such as RRSP`s or Investments to pay out the personal debt,prior to declaring bankruptcy?

Posted from: Ontario


One Response to “Private Personal Loans”

, A licensed trustee said:

No you should not. What you’re suggesting is called a Preferential Payment (paying some of your creditors before you file, but not all of your creditors). If you do this your trustee will be required to contact the people you have repaid to ask for the money to be returned. If it is not returned you will likely have to pay an amount equal to what you already paid to your family and friends to all of your other creditors.

What your suggesting may seem like a good idea, but it can complicate your bankruptcy and end up costing you a lot of money.

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