What are My Options When In Debt if My Income is from Social Assistance, Pensions, or Support Payments?
Everybody knows that debt occurs when your expenses become more significant than your income, meaning that you are unable to make payments on time.
However, when the income doesn’t come directly from an employer, you may be worried that your situation exposes to further risks.
Indeed, when you rely on social assistance and support payments for your everyday needs, it is imperative to understand how debt affects your non-work related income.
It is understandable to be concerned about your debt and how it affects your access to benefits, social assistance, or even your pensions.
BankruptcyCanada.com trustees are here to help you make a fresh start and protect your income from creditors.
Here’s our answer to your question: What are my options when in debt if my income is from social assistance, pensions, or support payments?
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Can my creditors take my income away?
If you can’t pay for your unsecured debt, creditors will try to collect the money you owe, either via a collection agency or through a lawsuit.
In your specific situation where you don’t receive wages, there is no wage garnishment option available.
Receiving no wages means that the totality of your income comes from child support, government pensions, social assistance, or any other support payment scheme.
The good news for our clients with no wages is that creditors can’t proceed with wage garnishment.
Nevertheless, your situation doesn’t cancel the debt. Creditors can still take you to court and relay your case to collection agencies.
It is worth noting, though, that some creditors can find ways of repaying themselves.
If you have unpaid credit debts with your bank, the bank can access your account to collect payment.
It can be a good idea to transfer your money to a new account, opened with a bank with which you have no existing debt.
How do I stop creditors’ actions?
You need to stop creditors’ actions rapidly to prevent them from obtaining a court order against you.
A licensed insolvency trustee can help you stop legal pursuits and collection agencies calls.
Indeed, only a trustee can administer legally-binding debt relief plans that put an immediate end to creditors’ actions and protect your income, such as personal bankruptcy.
When you file for bankruptcy, the debt is forgiven once you’ve paid the cost of bankruptcy, $1,800, which can be paid in as little as 9 months for first-time filing with no asset or surplus income.
However, you should know that in bankruptcy, you lose tax refunds and GST credits, which can make the process expensive.
I can’t pay for bankruptcy
You can turn to your family and friends for financial support to cover the bankruptcy cost.
Alternatively, the Office of the Superintendent Bankruptcy can assist in finding a trustee for a reduced fee.
You can also discuss the possibility of receiving help with the payment or getting an exemption from the financial costs of bankruptcy.
Depending on your financial situation, a trustee can also advise on other debt management strategies, such as a debt settlement plan or a credit counselling debt management program to help you repay your debt.
Alternatively, you can also review your option with another trustee-administered program, the consumer proposal, that enables you to discount the debt by up to 70%-80%.
Are you worried about managing debt without wages?
Let a trustee help you get a fresh financial start and protect your income.