Will Bankruptcy Take Care of Judgments?

Will Bankruptcy Take Care of Judgments?

There are two types of judgments.

Court_Gavel
Court_Gavel

The first, is one that a creditor can obtain against you through the courts to enforce an outstanding debt.  The judgment is typically registered against any property that you own and you cannot sell or remortgage your property until the judgment is paid in full.  The creditor also has the option to apply to the Sheriff to have your property seized and sold to satisfy the judgment.  Once you file forpersonal bankruptcy or once aconsumer proposal is accepted, the judgment turns into an unsecured debt and will get discharged with your other debts once the terms of the bankruptcy or consumer proposal are completed.

The second type, which can also be registered against your property, is referred to as a memorial judgment.  These are used by the Canada Revenue Agency (CRA) for outstandingincome tax, HST or source deduction debts.   Filing for personal bankruptcy or a consumer proposal will not automatically turn the memorial judgment into an unsecured debt.  This will require your Trustee to negotiate with CRA so they can come to an acceptable solution.

If you have unresolved income tax or business tax issues contact a licensed trustee to review your options.

For a free consultation over the phone or in person inSaint John,Moncton,FrederictonorCharlottetown, please contact us.  Powell Associates Ltd. is alicensed insolvency trusteefocused on providing debt settlement, proposal and bankruptcy solutions forindividualsandbusinesses.