Question: My husband is 70 yrs old and is collecting cpp and old age pension. Up to last November 2009 he was employed and was paying his credit card debts faithfully, even more than required because he wanted to get them paid off. Unfortunately the company he was working for no longer required his services and he found himself unemployed. Due to his age, he cannot find another job to pay his debts. He owes quite a substantial amount of money to 2 credit cards. He has absolutely no assets other than a 13 yr old car, which has approx 116,000 kms. His pensions pay his rent and food. Because he has to file income tax for 2009 he will owe the government taxes he cannot pay. Will he be able to claim bankruptcy on the credit card companies (banks) and the government income tax owed without the government taking his pension? Also, will he be able to get assistance from the government to help pay for bankruptcy costs? I am not working and collect a small cpp so cannot help him. My name is not on either credit card forms. He doesn’t know what to do. Right now he is receiving threatening letters and phone calls from the banks and is getting dangerously depressed. Please help with his situation in any way you can.
Sincerely
Shirley
Answer: Your husband has two options. First, he could open a new bank account at a new bank, and not pay his credit cards. The credit cards cannot garnishee his wages if he is not working. The government, however, can reduce what they pay him for CPP if he doesn’t pay them.
His other option would be to file bankruptcy in Ontario. The bankruptcy would discharge his credit card debts, and the taxes he owes to Canada Revenue Agency. All trustees offer payment arrangements, so cost should not be a problem. A typical bankruptcy for a resident of Ontario with no assets would cost approximately $180 per month for nine months, although costs will vary depending on the circumstances. He should talk to an Ontario bankruptcy trustee for more information.