Going bankrupt or filing a consumer proposal for $3,500.00 worth of debt makes no sense. The fees would be too high. I was assuming that there were other debts as well. In terms of dealing with this creditor your settlement of $150.00 per month sounds pretty good. I would recommend always communicating with the creditor in writing and keeping copies of everything. That way if you end up in court you will be able to show the judge that you have attempted to deal with the creditor.

Good Luck,

Chris

What would be the fee for such a proposal...and or bankruptcy.
I find it hard to believe they would accept less then the 150....with no interest.
But then again we do not know if this party has other debts they are having trouble with.

But to suggest a bankruptcy for a 3500.00 dollar debt is ludicrous.

Hi,

When a creditor issues a statement of claim what they are doing is attempting to get a "judgement' against you. A judgement is a court order that will allow the creditor to take legal collection action against you including garnisheeing your wages. For more information about judgements and how to stop creditors from garnisheeing your wages you can check out http://www.welker.ca/cms/cms/view/246/Wage-Garnishment .

It is very difficult to defend yourself. Although your debt resulted from a misunderstanding you do owe the money. Despite your unfortunate situation it is highly likely that the creditor will be successful in obtaining a judgement against you. Instead of trying to defend yourself you should focus your attention on eliminating the judgement. The only way to prevent or eliminate a judgement is to file a consumer proposal or make an assignment in bankruptcy. I would recommend reviewing your situation with a licensed trustee in bankruptcy.

Hope that helps,

Chris

If it goes to court and you lose...it would probably include interest and court costs and a portion of their legal fees. Might not be a bad offer. 24 mths of payments.

Nope, the statement of claim has the seal and number. I told them I can't pay what they want. They bumped it down to $150 a month now with no interest. Bah. Don't know what to do now... The offer they want to give me says if I default they will back charge interest to November 2010.. Nice.

Still very odd they sue so fast. Anywhere on that statement of claim does it say Draft. Top corner bottom corner....anywhere?
If there is no equity in the property....there is nothing to attach lean too since mortgage holderhas first dibbs. Pointless them spending good money after bad.

ANd will they still put a lien on if we have a payment arrangement via the court? Thanks

Also, can they put a lien on the property considering the mortgage is the value of the home? Thanks for your help.

No, not a loan. The way they work is they process your taxes and I thought they took their fee before you got your refund adjustment from the Canada Revenue Agency. Apparently this is not correct, you pay them a percentage of your refund. The debt occurred in May when I got the refund and they did not get their percentage.

You said in your initial post you got a return from government in May....you have not said when you incured the 3500 dollar debt.