Canada Bankruptcy - Credit Card and Line of Credit

Bankruptcy Canada Questions & Answers

Author:		Anonymous
Date:		May 26, 2010
Question:		Hi There! I am contemplating going bankrupt and I owe almost 50 thousand dollars in CC debt and an unsecured line of credit throught the bank of almost 20 thousand dollars. If I were to use the credit cards to pay off the line of credit at the bank can I keep the line of credits but not use it during the bankruptcy time frame? Am I allowed to do such a thing? Is this illegal? Can I keep the line of credit? In deep here!!
From:		Karen Alger & Associates Inc. - Alberta Bankruptcy Trustee
Date:		May 26, 2010
Answer:		If you do what you are proposing then you are offside and it will be an issue of contention in a bankruptcy. You are not permitted to maintain any debt in a bankruptcy - it's an all or nothing situation and if you increase one bank's debt by paying another you have given a preference which will be reviewed and likely reversed by the court. Karen Rideout phone: (403) 296-2973 Alberta Bankruptcy