i owe close to 85,000 in total

October 23rd, 2009 by Questions

I owe 6,000 to credit cards 2500 to a line of credit 7,000 to GST and close to 30,000 with my personal income tax and im stuck in a 3 year lease with a truck that i need for work which is 30,000. im still working full time with a major wage cut but still making 5000 a month before tax`s is there any alternatives i can consider before thinking about bankruptcy?

Posted from: British Columbia

Questions

One Response to “i owe close to 85,000 in total”


October 26, 2009 at 9:55 am, Barton Goth - Goth & Company Inc. -Trustee in Bankruptcy said:

In terms of options to consider, we suggest people consider the following when they are experiencing financial difficulty:

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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