Overdue payments, calls from collection companies, NSF cheques, bank overdraft. The list goes on and on. You feel stressed out just thinking about your debts. Want some peace of mind? Stop the madness and take control. Start by making a list of your debts showing the name, amount owing, interest rate, and minimum monthly payment that is due. I note that many credit cards now show how long it will take to pay off the balance owing if all you pay is the minimum payment and of course, if you do not make any new charges. Focusing on the 20 or 30 years will just increase your stress, not reduce it. Focus instead on which debts have high interest and which have the lower rates. You should be directing whatever money you have to those debts with a high interest rate.
The next thing you have to do is to track your spending for a few weeks (longer if possible). You will then need to prepare a budget for yourself to determine how much money you have each month to service your debts and allow you to live. Note that the budget is an average for a month (not 4 weeks) and you should allow for emergencies and debts like car insurance that are not necessarily paid on a monthly basis. If you need help, Trustees in Bankruptcy (soon to be called Licensed Insolvency Trustee), credit counselors, financial planners, etc. are usually willing to help you in assessing your budget and putting together a plan of action to pay off your debts. If you spend the time to put together the basic information, their fees will be nominal, their expertise invaluable.
Can I Max Out My Credit Cards and Then Go Bankrupt
You could max out your credit cards and then go bankrupt, as long as you do not wish your bankruptcy to go smoothly. Your trustee is obligated to review your spending for the period immediately before you file the bankruptcy. As well, all of the creditors will, by computer, review your charges on credit cards or debits looking for increased spending in the period prior to the date you filed the assignment in bankruptcy. The normal review period is 90 days but his can go to one year (5 years if real estate is involved) if the creditors or trustee has any hint of wrongdoing. If you make a significant purchase or cash withdrawal just before filing your bankruptcy, this is considered to be an offence under the Bankruptcy and Insolvency Act. The trustee, a creditor or the Office of the Superintendent of Bankruptcy will file an Opposition to your discharge from bankruptcy. You also might be required to attend an examination under oath to explain what you did and why you did it. This will result in your bankruptcy taking longer to complete as you may be required to attend a court hearing to obtain your discharge from bankruptcy. As well, you will be likely required to pay to the trustee the amount of the purchase or cash advance that you took. The trustee, of course, distributes these funds to the creditors. In extreme circumstances, the matter could be turned over to the police for investigation which may result in criminal charges of fraud. A finding of fraud results in the debt involved surviving both a bankruptcy or a proposal.
And all you wanted to do was buy that 60” TV or send money to help your family who are in a poor financial situation. Not a good idea.
So to answer your question, Can I Max Out My Credit Cards and Then Go Bankrupt? The answer is NO.
Taking precautions to avoid scams and frauds is another way to protect your assets against financial abuse. Hustlers are constantly coming up with new scams to deceive elderly people. It is important to never respond to e-mail, phone or door-to-door offers from people or groups you do not know. Most often, if an offer seems too good to be true, one can assume it is. Protect your personal information–reputable organizations will not e-mail, write or call and ask you to confirm information about your bank account or financial affairs. Financial abuse is illegal and/or unauthorized use of your money or property, or pressure on you for use of your money or property.
Unfortunately and sadly, abusers are often people in positions of power in your life, such as a family member, caregiver or someone you live with. If you think you may be the victim of financial abuse, a fraud or a scam, do not feel ashamed and you are not at fault–many people are in the same situation and it is important you do not stay silent. Tell someone you trust about what is going on and how you are being treated and take precautions. If you do not feel you can trust anyone or do not feel comfortable talking to someone you know, you can report financial abuse and/or fraud to the police.
The federal government has several benefit programs for individuals over 65 who have lived in Canada for over 10 years. However, you must apply for Old Age Security (OAS), Guaranteed Income Supplement (GIS), Spouse’s Allowance, Canada’s Pension Plan (CPP) and other federal programs. You will not receive them automatically! Because many programs use your income tax return to decide if you are eligible, you should file a tax return by April 30 each year. This will also allow you to claim a GST rebate and other refundable tax credits. Remember to notify Service Canada if anything changes in your life. For example, if you are receiving OAS, GIS, the Allowance or CPP and you move or your situation changes, for example, if your spouse passes away.