People are always surprised when I tell them to stop paying their creditors.
In many cases it’s the best advice. Once you’ve determined that you can’t dig yourself out of your personal debt issues on your own, you should stop paying the creditors that will be included in your consumer proposal or personal bankruptcy filing.
Making additional payments prior to filing does not affect your credit rating or how the process will work. For example, if you owe $50,000 or $55,000 because you’ve missed payments prior to filing, your consumer proposal or bankruptcy process is unaffected.
Despite filing, you still need to keep paying your utility bills, rent/mortgage (if you plan to stay living where you are) and other regular living expenses. If you stop making payments to creditors prior to filing, you will be able to save up some money, catch-up on your ongoing bills, plus you will have some money to survive.
If you’re thinking of filing personal bankruptcy or making a consumer porposal, contact us for a free initail consultation.