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Greetings! My parents are considering filing bankruptcy, and I have been trying to help them decide. My father is a self-employed tradesman who usually makes approximately $35000 total income, and my mother will soon be on disability, and cannot work. My father recently was injured and had been unable to work for 3 months, and has recently been diagnosed with cancer and so can only now work part time. My parents have $90,000 in unsecured debt, and we have very few assets and do not own our home. It has been extremely difficult to make all the payments, but my parents have never missed payments and still maintain a spotless credit history.
A few years ago I received an inheritance worth approximately $40,000 and loaned $25,000 to my parents to help reduce the interest. Before my dad was injured & diagnosed with cancer, about 10 months ago he succeeded in paying me back the full amount by taking out credit card debt. I am over 20 but am still considered a dependent. Should my parents file bankruptcy? If so, should they wait until 12 months have passed since the repayment? Also, are assets owned solely by dependents (such as computers, bicycles) protected from liquidation? Any advice is greatly appreciated. Thank you.
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Answer: |
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It is impossible to tell if our parents should make an assignment in Bankruptcy without making a detailed assessment. However, given their situation, they would be eligible to file. They need to sit down with a trustee for a detailed assessment. Because they repaid the loan from you while they were unable to pay other creditors, it is possible that this repayment could be considered a preference and subject to repayment. As for the bicycles and computers, it really depends on 2 things: the exemptions in the province in which you live (see our website - what can I keep?) and the value of these assets.
Bruce Alger
phone: (403) 296-2970
balger@alger.ca
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