what can I do

November 23rd, 2008 by Questions

My husband is leaving and moving out west I am 63 have about 9000.00 credit card debt and have no money to pay them I get my pension of 276.00 monthy and have been paying them but cannot anymore as I may have to go on Social Assistance…what can I do….
thanks
Bunny

Posted from: Quebec

Questions

One Response to “what can I do”


, Barton Goth - Goth & Company Inc. -Trustee in Bankruptcy said:

You may not have to do anything. The reason for this is that based on your income there is very little the creditors can do to force you to make payments, your income is to low to seize / garnishee, you likely have no assets they can attack, so as long as the stress isn’t getting to you then you may want to consider simply stopping paying the debts and exercising some patience as once the creditors figure this out they may simply stop the harrassement.

Alternatively we always suggest people consider the following options:

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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