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Reduced income

Until recently,we were “on top” of our bills (approx. $60K in credit cards and a line of credit)
Due to unforseen circumstance and poor health,my wife had to give up her (quite lucrative)job.
My income is from CPP disability and a private disability insurance.Other than this,the only other source of income is the child support and Child Tax Credit received by my wife.
That puts our family income (3 people) at aproximately $2500/month.
After household expenses are met,we are left with about $150 without budgeting for any emergencies.
One credit card company has suspended us from using their card and started with the “Dear Deadbeat” letters.
I would make a proposal if there was any pie TO cut; anything I could offer would be considered an insult.
I have been told (although not by a trustee)that our income source would be classed as creditor proof and as such we would have to do nothing but put up with the phone calls that have already started for the months it would take for them to give up.
I would hate to do this as I would feel I was “skipping out” of legitimate debts but feel I am backed into a corner.
Also,I have been told I can write creditors and ask them to confine thenselves to comunicating only by mail.Is there any truth to this?
Sorry for the book;this whole thing has me in quite a mess.

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One Response to “Reduced income”

A licensed trustee said...

What you really want to know is “do you have options?”

Yes, you do.

There is some truth to the fact that you may be “creditor proof”, that is, the types of income that you have are not easily attacked by creditors. That means that you may be sued, but a Court is not likely to order the garnishee of payments from your income. It doesn’t solve the problem, but from a practical standpoint it means until someone returns to work you may ignore the problem.

If you live in Ontario, you have the right to send a letter to any collection agency that is contacting you and request that they correspond only by letter. Alternatively, you could simply switch to an unlisted number. Once again, this doesn’t solve the problem, but it may make it easier to ignore it.

If you are looking for a more permanent solution then I suggest you contact a trustee in your area and discuss whether or not bankruptcy makes sense for you. If you can put up with the collections agents you certainly don’t need to file, but if you want to solve the problem instead of ignoring it then bankruptcy may make sense.

Good luck sorting things out.