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Debra
Debra, Lawyer
Category: Canada Law
Satisfied Customers: 98543
Experience:  Lawyer
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A credit recovery agency has taken over a debt we owed to an

Customer Question

A credit recovery agency has taken over a debt we owed to an MBNA credit card and are taking us to small claims and have filed a claim. We have no defence other than we were unable to pay - should we file a defence and what would it be?
Submitted: 1 year ago.
Category: Canada Law
Expert:  Debra replied 1 year ago.

Do you agree with the amount owing?

Do you have any assets?

Customer: replied 1 year ago.
The amount owing includes a lot of compound high rate interest, but it would seem to be properly accrued.We do own our home but it is unlikely we can get a loan due to limited income.
Expert:  Debra replied 1 year ago.

Is there enough equity in your home to cover the amount owing to them?

Customer: replied 1 year ago.
Expert:  Debra replied 1 year ago.

I was going to suggest that you consider declaring bankruptcy, but as you have equity in the house it would not make sense because you would end up losing your house.

I suggest that you try to settle this by stating that you will put in a defence and this will take a lot of time to resolve and that you simply do not have the ability to pay, but if you cannot settle because they won't agree or because you simply cannot pay anything then it does not really make sense to put in a statement of defence because buying yourself some time will not really matter.

I am sorry that I do not have a better answer for you but as you have equity in your house and as you really do owe this money there really isn't any good legal solution or practical solution if you cannot borrow the money.

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