What Happens If I Don’t File Bankruptcy But Have A Lot Of Debt?

Bankruptcy is often seen as the last resort for those grappling with overwhelming debt. But what happens if you decide not to file for bankruptcy, despite having a significant amount of debt? This comprehensive guide delves into what awaits you in such a scenario.

Understanding the Debt Collection Process

The journey of an unpaid debt usually starts with the creditor filing a lawsuit against the debtor. If the court rules in favor of the creditor, a judgement is issued confirming the validity of the debt.

Having a judgement against you can lead to several consequences. Primarily, the judgement creditor has the right to garnish your wages or seize your assets.

Garnishment of Wages

If you’re a wage earner, the judgement creditor can take a portion of your earnings above a certain threshold. The exact amount varies by province. For instance, in Saskatchewan, anything earned over $500 in a month plus $100 for each dependent can be garnished.

Remember, pensions and social service payments are generally exempt from garnishment.

Asset Seizure

Judgement creditors can also seize non-exempt assets. The list of exempt and non-exempt assets varies by province. In general, cash and bank accounts are non-exempt, making them susceptible to seizure.

Harassment by Creditors

Aside from the tangible consequences, you may also face constant and repetitive calls from creditors attempting to collect their payments. However, each province has laws regulating when and how often a creditor can call.

Impact on Secured Debts

Secured debts, such as car loans, have collateral attached to them. If you fail to pay, the secured creditor can seize the collateral—in this case, your car.

Provincial Laws Impacting Debt Collection

Provincial laws play a crucial role in the debt collection process. They define the terms for wage garnishment, asset seizure, and creditor calls.

How to Cope with Debt

If you’re dealing with a lot of debt but want to avoid bankruptcy, consider seeking professional help. Financial experts can guide you through your options and help devise a plan best suited to your situation.

When to Consider Bankruptcy

While bankruptcy should be your last resort, it might be the best option in certain cases. If your debt has become unmanageable and you’re facing severe consequences like wage garnishment or asset seizure, it might be time to consult a bankruptcy professional.


Not filing for bankruptcy when saddled with a lot of debt can have serious repercussions. From wage garnishment to asset seizure, the consequences can severely impact your financial stability. It’s essential to be aware of these consequences and seek professional help to navigate the complex world of debt management and recovery.

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