Question: I had a small business in which I was sole proprietor and not incorporated. Several bills piled up over the course of six months, as business took a drastic plummet. Three months ago I closed my business. I couldn’t pay my rent, pay the inventory bills or anything else. Since then, I have had major surgery and used the little bit I got from selling the stock to live on. Now the money is gone, I have no income and cannot return to a paying job for eight more weeks. I feel like I’m corned with no way out except bankruptcy.
I am in debt of approx $72,000.00. I don’t know what to do. I bought a small house seven months ago, so there is obviously no equity built up yet, and the above mentioned debt does not include the house. I’m drowning and need direction. Could you point me in the right direction?
Answer: Yes, you need to meet with a bankruptcy trustee to review your options. The answer will depend on how quickly you will be returning to work. If you will be working again in eight weeks, then that is the time to make the decision about whether or not to file bankruptcy. While you are not working your creditors cannot garnishee your wages.
However, once you return to work the creditors could pursue you. Unless you can earn enough to pay them back, bankruptcy may be the most logical option, although a consumer proposal is also an option that the trustee will discuss with you at your free initial consultation.