Question: I lost my job 8 months back and have been surviving on EI. I have been using my credit cards to help make ends meet. I have used them to buy food, clothes and my utilities. I’m receiving collection calls now and one of the collection agents said I can’t go bankrupt because I have used my cards to buy neccessities. Is that true?
Answer: It is not true. More than a decade ago the Bankruptcy and Insolvency Act or Bankruptcy Act as it was previously called was amended. There used to be a provision in the Bankruptcy Act that “necessaries of life” would survive a bankruptcy. That provision was repealed and it no longer applies. Credit card debts are forgiveable in a bankruptcy even if they relate to food, clothing or other living expenses.
