Can I file bankruptcy in Sarnia if I have been sued for a debt I owe?

by Joel Sandwith on July 19, 2011

Last week I did a short blog on lawsuits and bankruptcy, specifically related to lawsuits where there are damages awarded.  Today I’d like to address a different type of lawsuit, the one where someone you owe money to sues you to collect that money.

Most of the people we meet with have either been sued, are about to be sued, or are in danger of being sued.  The reality is that if you cannot pay your debts, eventually the people who are owed money come after you through the Court system.

So, what are your options if you have been sued?  Well, the first is to pay the debt, either on your own, or through a garnishee of your paycheck.  But, if you had the money to pay, you’d have paid, so this likely won’t work very well and could be very difficult.

The second option would be to file personal bankruptcy.  A personal bankruptcy ‘stays’ or stops most lawsuits.  (If you’ve been sued for child or spousal support, bankruptcy won’t stop that).  Even if your pay has already been garnisheed, filing a personal bankruptcy can put a stop to that.

A third option may be to file a consumer proposal.  A consumer proposal is an option where you offer to repay a portion of your debt, over a period of time.  For example, you may be able to pay back 50% of your debt, over 5 years.  This could be a lot easier to live with than a garnishee.  Not only that, if the proposal repays more of the debt than the creditor would get in a bankruptcy, they will likely take that deal.

If you are struggling with debts, cannot pay, have been sued or garnisheed, please feel free to give us a call at Hoyes Michalos, toll free at 1-866-747-0660 or locally here in our Sarnia office at 519-344-1058.  We’d be happy to discuss all of your options with you, and help you to determine what can be done to deal with your debts.

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