what do I do??

October 22nd, 2009 by Questions

Ok I know this sounds bad, but I`ve been in `hiding` for almost 10 years regarding a student loan. The only reason I didn`t pay it, was because at the time of the loan, I was a single mother on welfare; I wanted to be able to provide for my family, so I decided to further my education. The school was a private school, and they lied to me regarding this situation; I tried to take them to court over it, but it was pointless. I was stuck in a loophole just shy of 3 months of being able to `qualify` for exemption from my living portion of the loan. The story is complicated, so I won`t elaborate. Point is, if I had enrolled just 3 months later, I would not have had to pay the `living` portion of my loan. My question is…how long till they stop looking for me? I did declare bankruptcy because I became very ill during my second pregnancy, and lost my job. The student loan was obviously not exempt from this. I am rebuilding my credit, but I know one false move and they may find me. I am not a dishonest person…I justify this by thinking that had I stayed on Welfare a couple more years, it would have cost the taxpayer money. I didn`t want to do that…so I went to school thinking I was bettering my life for me and my children. Now I have this debt hanging over my head….how long till they stop looking for me? And if they find me, do I have a leg to stand on??

Posted from: Ontario

Questions

One Response to “what do I do??”


October 23, 2009 at 9:27 am, Barton Goth - Goth & Company Inc. -Trustee in Bankruptcy said:

Typically creditors do not simply stop looking for someone.

So you now have a In terms of what to do, we suggest people consider the following options when they are experiencing financial difficulty include:

1. Negotiate with your creditors. Explain why you have fallen behind in payments. Outline your financial situation and expectations for the future. Suggest a payment plan that is realistic and reasonable for both you and your creditors. As this is an informal process make sure that if you come to an agreement get written conformation. .
2. Apply for a consolidation loan. Take out a loan to pay off all of your debts. This can potentially lower your interest rate, total monthly and sometimes the total length of the contracts. With consolidation loans it is important that you examine your current spending habits and stop using your so you do not continue to fall further behind.
3. Make an application to Credit Counseling. This is a voluntary program where your debts are pooled together (they aren’t actually paid off) so that you are only required to make a single monthly payment to a non-profit counseling agency. As you make your payments the agency forwards funds to each of your creditors in proportion to your total debt. The advantage of this procedure is that usually the interest on your unsecured debts is reduced to prime or even eliminated. You are required to repay 100% of what you owe, but because of the reduced interest your monthly payment is much lower than all of your minimum payments would have been without the plan.
4. Make a proposal to your creditors under the Bankruptcy and Insolvency Act. This solution is used by people who cannot afford (or get approval for) a consolidation loan or a credit counseling plan, but don’t want to file bankruptcy. In a proposal you offer to repay a portion (perhaps 100%) of the debt that you owe. Proposals are an excellent alternative to bankruptcy, but they are not well known so I suggest you contact a local trustee and ask them about proposals if you are interested in this solution.
5. File for bankruptcy. If none of the other procedures listed is appropriate for you then bankruptcy may be correct solution. The concept behind bankruptcy is that you cannot afford to repay even a portion of your debts. To file bankruptcy you must meet with a licensed trustee.

Certain provinces have an additional option for their residents called an Orderly Payment of Debts. When you speak to a trustee they will advise you whether or not this solution is available where you live and makes sense for you.

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