Life after an Edmonton Bankruptcy – What Happens to the Collection Calls and Letters

Many Canadians across the country still find themselves in financial difficulty, despite some glimmers of hope on the global economic scene. Edmonton is no exception. Although an Edmonton bankruptcy is rarely the first choice of anyone, even those deeply in debt, some do take the time to learn what bankruptcy is all about. They find there is in fact a life after bankruptcy, and much of it is good.

One thing they learn is that, unlike some more popular debt solution alternatives, Edmonton bankruptcy comes with legal protection. Some Edmonton residents who have been struggling along dealing with mounting debts reach a breaking point when they receive a legal garnishment notice. Faced with the prospect of having their wages attached, they come to see us, ready to file. Others accept the garnishment and continue to struggle, but end up seeking refuge in bankruptcy.

Bankruptcy stops wage garnishments, even if they are already underway. It also stops any other legal collection activity in progress against you. Once you declare bankruptcy, your creditors get a notice informing them of your filing and legally barring them from continuing any legal actions against you now, and prohibiting legal actions in the future.

In addition, bankruptcy stops collection calls and letters. However, there is a rare exception, but one you need to know.

We recently had a client tell us a friend started getting collection calls about a month after receiving their discharge from bankruptcy. Here is what can happen.

Debt collection has become big business and some creditors sell the debts they are owed to professional debt collection companies. When a consumer gets behind on a debt, or stops paying at all, the creditor is faced with a choice. It all comes down to the money. If the debt is large and the creditor discovers you have assets such as a home, it may be worth their cost to begin legal collection action.
<Read more >>