Question: Hi, this is my situation, I only have two student loan debts one is a provincial and one through a bank, my 7 years have passed and I was advised to file for bankruptcy, but I don’t want to lose my childs RESP or my newly financed car. Should I tell the creditors that I am planning to file, to see if they could make a deal with me for monthly payments to pay off a agreed portion of my balance or should I go ahead with my bankuptcy. And how do finance companies usually respond when you tell them you are filing?
Answer: Yes, bankruptcy should be a last resort, so attempting to work out payment arrangements would be a good first step. If you can’t reach an agreement, bankruptcy is an option. In most cases car loan lenders will allow you to keep your car if you go bankrupt, provided you are not behind, and you continue to make your monthly payments. Your Ontario bankruptcy trustee can provide you with more information.