Question: I was told today by a 3rd party collection agency that if I have not made a credit card payment in 7 months-(Owe on one $13,000.00) then they can take me to court and if I have not yet filed for bankrupcy (we think we must as we can not pay the cards), when I do, if judgment is received before We file it does not account in the bankruptcy in Ontario- meaning I would still owe.
We owe a lot due to trying to run a small business and we have hit the wall if we have to pay minimum payments to cards. We are considering bankruptcy but if a judgement is reached how is handled in? are we still liable?
Answer: No. The point of bankruptcy is to discharge your debts. If you file bankruptcy, all court actions from credit card companies stop. If they have a judgment it is “stayed”, which is a fancy word meaning the credit card company or the collection agency can’t use the judgment to garnishee your wages. In fact, your trustee will contact the court and advise them that you have filed bankruptcy, which will stop further court proceedings, and suspend any that are already in progress.
Your Ontario bankruptcy trustee can provide you with more information.
Tags: collection agencies, judgment