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Law Girl
Law Girl, Attorney
Category: Bankruptcy Law
Satisfied Customers: 4606
Experience:  I am an attorney.
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Im on the debtors assistance program since April

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I''m on the debtors assistance program since April 17 2001, due to student loan debt. I''ve been compliant with consolidation orders, in 2005 my husband to be at the time took out a credit line, and I signed my name. Today I received a letter stating "under section 233 (1)c of Bankruptcy and Insolvency Act, debtor is restricted from incurring further debt in excess of $500. They have asked me to sign a letter to verify compliance in order to do a credit check. My understanding is that I can''t take out any loans, or have a credit card, or make major purchases, but what if now my husband takes it out, would this disqualify me from the debtor assistance program? What further recourse can the debtors assistance have?
Submitted: 9 years ago.
Category: Bankruptcy Law
Expert:  Law Girl replied 9 years ago.

Dear lousalter:

By signing your name, it sounds like you were also a party to taking out the credit line, which would be a violation of the terms of the Act and potentially your debtor's assistance program. If your husband takes out the loan, that is fine, you are just unable to be a party to the loan. If the debtor's assistance finds out that the terms of the program have been violated, then they can drop you from the program. They may also have other recourse as laid out in your contract with them.

Please let me know if you have any other questions, or require clarification of this matter. Otherwise please hit "ACCEPT", so I may receive credit for my response. Tips and feedback are also appreciated.

Good Luck!


Customer: replied 9 years ago.
Reply to Law Girl's Post: I went to see the bank and they say I'm a co-applicant, and that they did not know that I was on the Debtor's assistance program. This is false, I've been honest with them from the beginning, since I knew I could not take out credit, or make any other purchases. My understanding was that by signing , I would not be the applicant, but help with the payments. My husband was the main applicant. Since I've been on this program, I've made payments, faithfully and have not been able to financially accumulate or invest or purchase, for almost eight years. It doesn't seem fare to me, when I am working for the government, that they should penalize me, and cut me off like this now. I am very upset about this, will seek legal advice.
Expert:  Law Girl replied 9 years ago.

Unfortunately, the only reason they would have you sing the loan is if they considered you a co-applicant. I am not sure the bank understood that although you would be making some of the payments, you could not sign documentation making you legally responsible for any of the payments.

It may behoove you to seek legal advice to ensure that your rights are protected moving forward.

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