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A collection agency will only take you to court if they think they have a chance of getting some money out of you. If, for example, a medical condition has severely reduced your income generating ability and the situation is unlikely to change in the foreseeable future, there is no point for the collection agency to incur court costs. Even if they win the judgment, you are still unable to pay them.
If the collection agency decides that you do have the ability to make payments but are refusing to do so, they may proceed with the court case. Usually, both parties agree that the debt is owed. The problem lies in the differing perceptions of the ability to pay the money.
The hearing typically takes very little time and the court issues a judgement that states that you owe money to the collection agency and the creditor(s) it represents. At this point, you may be able to find a way to make payments, or you may not be capable of doing so.
The collection agency can now, armed with the signed judgement, ask the court to permit them to seize assets (such as money in a bank account, equity in property, etc.) or garnishee your wages. If the creditor does not know where you are employed, they cannot enact the garnishment.
IN THIS SECTION
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- Why did my trustee
tell me to file all outstanding tax returns?
- I’m declaring
bankruptcy because of taxes. Is this allowed?
- Will I
still owe my student loan after bankruptcy?
- I can’t afford
to pay back my student loan and it’s been less than seven years
since I left school-what are my options?
- How long does bankruptcy
last?
- Can I keep my car
during bankruptcy?
- Can I keep
my RRSP during bankruptcy?
- Can I keep
my home if I declare bankruptcy?
- Will
I still be able to rent an apartment or home if I declare bankruptcy?
- Can I
keep a credit card during bankruptcy?
- Is
it okay to use a credit card if I am thinking about bankruptcy?
- Can I
get a checking account after bankruptcy?
- I
co-signed on a loan for someone who declared bankruptcy. What happens
now?
- If I’m
married and I file for bankruptcy, does it affect my spouse’s
credit?
- If my spouse
declares bankruptcy and I am listed on their credit cards, am I responsible
for the debt?
- I am divorced
and my ex has declared bankruptcy. Do I still owe for debts and credit
cards that I co-signed with my spouse?
- If I file
for bankruptcy, will it be noted on my spouse’s credit file?
- Will filing for
bankruptcy affect my job situation?
- Who will find out about
my bankruptcy?
- Can I get utility services
(telephone, cable, hydro, gas, etc.) after bankruptcy?
- Can I keep
any money if I declare bankruptcy?
- What is surplus income?
- Can I go to jail
for not paying my debts?
- The
collection agency is threatening to take me to court: can they do
that?
- What happens
if a collection agency takes me to court?
- I am behind on my debt
payments; can a collection agency take my furniture, electronics,
clothes, etc.?
- I am
being harassed by a collection agency: what can I do?
- Can I stop a wage
garnishment?
- How do
I find out if someone is bankrupt?
- What is Chapter 7 bankruptcy?
- What is Chapter 13
bankruptcy?
- What happens if
I live in both Canada and the U.S. and declare bankruptcy?
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