Can I do anything to stop a creditor’s legal proceedings against me?

It’s possible that if you’re having trouble meeting your payments, a creditor may take some kind of legal action in order to collect the debt you owe. This can include handing your account over to a collection agency, having your wages garnished, or taking you to court. If any of these things have already happened, is there any way to stop them? Absolutely.

In Canada, consumer proposals and bankruptcies both fall under the umbrella legislation of the Bankruptcy and Insolvency Act, which was put in place in order to give overwhelmed debtors a fresh financial start. Part of that fresh start includes halting any legal actions brought against you by creditors. This means that as soon as you file for bankruptcy or make a proposal, collection agencies must stop calling you, wage garnishment ends, and any court proceedings begun by creditors are halted.

In order to take advantage of one of these options, you’ll need to speak with a licensed bankruptcy trustee. A trustee will advise you on what your best plan of action is, walk you through the necessary process, file the necessary papers with the Office of the Superintendent of Bankruptcy, and ensure that your creditors are notified so their legal actions stop.

It’s important to understand that any action taken by a creditor against you in order to collect a debt can be an indicator that you are in serious financial trouble. If you are facing wage garnishment, calls from collection agencies, or any kind of legal proceeding started by a creditor, you need to take action as soon as possible. No matter how bad your financial situation may seem, you have options—and the sooner you find out what those options are, the sooner you’ll be on the road to financial recovery.

For more information about how a consumer proposal or bankruptcy might help you get back on your feet—or to find out what your other options might be—call today for a free, no-obligation consultation with one of our insolvency experts: in Ottawa call 613-237-5555; out of town, call toll-free 1-800-517-9926 or book online.

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