How to Avoid Bankruptcy - Part 3

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Ten ways to make yourself creditor proof.

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<ul><li><p> Please contact a professional bankruptcy trustee to help guide you through your options. </p><p>1-888-823-8239 or Bankruptcy-Canada.ca </p><p>Ten ways to make yourself creditor proof </p><p>If you are an unsecured creditor it can be difficult recovering monies from people that owe you </p><p>money. It is possible for your creditor to sue you, obtain a judgment against you, and then never collect </p><p>a penny from you despite the fact that it has obtained a judgment against you. </p><p>If you are experiencing debt problems then there are a number of things that you can doall of which </p><p>are perfectly legalthat will make it more difficult for your creditors to recover any monies from you. If </p><p>you are able to effectively use one or more of the following tactics then your creditor might never be </p><p>able to recover a nickel from you. </p><p>1. Avoiding having monies scooped under a creditors right of set-off </p><p>If you are struggling to pay your debts then it is not prudent to do all of your banking at the same </p><p>financial institution. If, for example, you have both a bank account and a credit card through ABC Bank </p><p>and you do not make your minimum monthly payment on your credit card then your bank has the right, </p><p>under something called a right of set-off to take the amount of your minimum payment out of bank </p><p>account and use those monies to make the minimum monthly payment on your credit card. </p><p>Ideally, if you currently are having debt problems, or you anticipate having debt problems in the future, </p><p>then you should close all of your bank accounts at a financial institution where you have credit cards, </p><p>personal loans, lines of credit, or the financial institution where you obtained your mortgage. You can </p><p>make these payments from a chequing account at another financial institution. </p><p>2. Selling your real property </p><p>Creditors are much more likely to sue someone over an unpaid account if the consumer owns real </p><p>property in their own name. If you anticipate that you will no longer be able to make the payments on </p><p>your unsecured consumer debt in the future then you should seriously consider putting your real </p><p>property up for sale. This might enable you to save the equity that you have accumulated in your real </p><p>property. </p><p>3. Avoiding ownership of property in your own name </p><p>If you are a debtor, then ideally you will not any property in your own name. If you are married then </p><p>any assets that you purchase should be purchased in the name of your spouse. If you are not married </p><p>then when you acquire an asset in the future then you might want to acquire the asset in the name of a </p><p>family member who not only you trust but also does not have debt problems of their own. </p></li><li><p> Please contact a professional bankruptcy trustee to help guide you through your options. </p><p>1-888-823-8239 or Bankruptcy-Canada.ca </p><p>4. Driving an inexpensive automobile </p><p>Every province in Canada has a law which exempts certain property from seizure by judgment </p><p>creditors. This law means that if your creditor were to sue you and obtain a judgment against you that </p><p>some of your property could not be seized by your creditors. This exemption is typically around $10,000 </p><p>for items found in a residencefurniture, appliances, and clothing. </p><p>There is also a specific exemption for motor vehicles which is approximately $4,000 to $6,000 depending </p><p>upon which province you live in. This means that if are experiencing major financial difficulties it would </p><p>be more prudent for you to be driving a car with a Blue Book value under $5,000on which you are </p><p>making the required monthly payments unless you paid cash for itas opposed to a more expensive </p><p>vehicle. </p><p>5. Getting along without a savings or a chequing account </p><p>There are two circumstances where, ideally, you want to avoid having a bank account in your own </p><p>name. Firstly, if you owe monies to the Canada Revenue Agency it will seize monies in your bank </p><p>account and apply it against monies owing to the Federal Government. The Canada Revenue Agency, </p><p>unlike other creditors, can do this even if they have not obtained a judgment against you. Secondly, if </p><p>you owe monies to any creditor and that creditor, sues you, and subsequently obtains a judgment </p><p>against you then it can effectively seize monies in any bank account in your name using a garnishment. </p><p>For many Canadians it is possible to live without a chequing account or a savings account. It is possible </p><p>to cash a cheque payable to yourself, for a fee, at any one of a number of firms that offer payday loan </p><p>services. You can cash your cheque at these locations without opening a bank account. You might even </p><p>want to take advantage of a secured credit card available through a payday loan firm. For example, if </p><p>you obtain a Titanium VISA through a Cash Money outlet then you can make recurring payments to your </p><p>creditorsfor expenses such as phone bills and internet services without the necessity of having a </p><p>bank account. </p><p>6. Avoid owing more than $3,000 to a single creditor </p><p>It is not cost effective for creditors, especially large creditors to sue consumers for relatively small </p><p>amounts of money. It is possible that a person might owe $25,000 in unsecured consumer debt but he </p><p>doesnt owe more than $3,000 to a single creditor. There is a good chance that this consumer might not </p><p>be sued by a single creditor because the consumer does not owe more than $3,000 to any one creditor. </p><p>7. Where possible seek employment in a field where you can change employers </p><p>If your creditor sues you and obtains a judgment against you then your creditor might try and recover </p><p>monies from you using a wage garnishment through the courts. In order to do a wage garnishment your </p><p>creditor has to find your employer, and serve the appropriate documents on the court and on your </p></li><li><p> Please contact a professional bankruptcy trustee to help guide you through your options. </p><p>1-888-823-8239 or Bankruptcy-Canada.ca </p><p>employer. Once your employer receives the appropriate documents then it will be necessary for your </p><p>employer to deduct a portion of your wages from your paycheque and remit it the court for distribution </p><p>to one or more of your judgment creditors. </p><p>If you have a low-paying job in the service industry your creditor will likely not attempt to use a wage </p><p>garnishment against you because most people will simply quit their job and find another job with a </p><p>different employer to avoid having any further garnishment of their wages. There are many jobs where </p><p>employers compete for staff which are well-paying jobs. Dental hygienists would be one such job. If </p><p>you are a dental hygienist living in a major metropolitan area and a creditor obtains a judgment against </p><p>you then you might very well quit your job and get a dental hygienist job with a different employer if </p><p>your current employer were to receive a garnishment notice from the court. </p><p>8. Taking advantage of wage garnishment laws in your province </p><p>Depending upon your financial circumstances, and the province in which you live, it might be possible </p><p>for you to take advantage of the wage garnishment law in your province to mitigate the impact of a </p><p>wage garnishment. </p><p>Take advantage of wage garnishment laws which protect low-income workers </p><p>With the exception of Ontario, every province and territory in Canada has a law which has a minimum </p><p>exemption from wage garnishments against the residents of that province. These laws provide some </p><p>relief to low income consumers whose wages are subject to a wage garnishment. Depending upon your </p><p>circumstances, some or all or your wages might be protected from wage garnishments. </p><p>Bring a motion before a judge to reduce the amount of monies deducted from your pay under </p><p>a garnishment notice </p><p>In virtually every province it is possible for a consumer to bring a motion before a judge in which the </p><p>consumer is seeking an order from the judge reducing the amount of money deducted from a persons </p><p>wages on the basis of financial hardship. </p><p>9. Relocating to New Brunswick </p><p>If you owe monies to your creditors then one option you might want to consider is moving to New </p><p>Brunswick which has been described as a debtors haven. I can recall a phone call many years ago with a </p><p>civil servant, responsible for supervising the conduct of collection agencies in New Brunswick, who </p><p>described her province as a debtors haven. New Brunswick is the only province in Canada which does </p><p>not permit garnishments. This means that if your creditor sues you and obtains a judgment against you </p><p>that if you move to New Brunswick and rent, as opposed to owning real property, then you might very </p><p>well never pay a penny to your creditor in connection with your creditors judgment. </p></li><li><p> Please contact a professional bankruptcy trustee to help guide you through your options. </p><p>1-888-823-8239 or Bankruptcy-Canada.ca </p><p>10. Moving outside of Canada </p><p>Creditors, and their authorized collection agents, have a poor track record of recovering monies from </p><p>Canadians who move outside of Canada. In my twenty-two year career in the collection industry I am </p><p>not aware of a single instance where a Canadian creditor has sued a Canadian living outside of Canada </p><p>and successfully recovered any monies from them. </p></li></ul>