Business Bankruptcy in Canada is primarily governed by the Bankruptcy and Insolvency Act (BIA), a…
In India, you can go to jail for your debts.
How about Canada? Not a chance. Unless of course, you’ve committed fraud. But then fraud is a whole ‘nother thing.
So, exactly what does happen if you are not able to pay your bills?
If you’re like many Canadians, you are doing your fair share to contribute to the…
$2.2 trillion in debt!
That’s small comfort when debt collectors are hounding you for money.
And, what if you have tax bills, fines, or student loans? It doesn’t matter.
You’re not going to jail. But… if you think your creditors’ hands are tied, that’s simply not true.
The process goes something like this:
- Once the creditors have tried and failed to collect the money, they send your bill to a collection agency.
- Collection agencies must follow certain rules. But they can be quite aggressive in their efforts to collect.
- That’s because the only way they make money is to get the money from you.
- An unscrupulous debt collector may even threaten to have you arrested or deported.
But, as you now know, that’s just not true.
However, debt collectors can make your life miserable.
If they cannot collect the money and you simply ignore them and refuse to talk, they can take you to court.
If you’ve ever been to court, you already know it ranks up there with a root canal.
- You will stand before a judge who decides what you already know: yes, you owe the money.
- Your creditor will then ask for a judgment to be enforced so they can get paid what is rightfully due.
- The court can now garnish your wages. Seize your bank account. Even take your possessions, like your car.
You may have lost your job, gotten sick. Or had a major catastrophe due to a stroke of bad luck.
Doesn’t matter. What matters is that you can’t pay your bills.
If you lost your job and truly don’t have any funds, you may be able to walk away with a bad hit to your credit score.
But, before you take that dismal Equifax score too lightly, you should understand the possible consequences.
Employers can check your credit score when you go for a new job or promotion. Is that fair?
Doesn’t matter. It’s the truth. The cost of that $20,000 credit card bill may be a six-figure dream job.
So what do you do when you can’t pay your bills?
You do have options.
- You can negotiate with your creditors.
- You can consolidate your debt.
- Or you can seek protection under the law.
It’s your choice on how to get your financial life back on track.
If you need help working through the options, call a Licensed Insolvency Trustee.
They are government-registered to help you sort through it all and figure out the best course of action.
You don’t have to do this alone. You aren’t headed to jail. But it does matter how you handle your debts.