Tired of Struggling
November 4th, 2010 by Questions
My husband and I have a joint low interest credit card (6.25%) with a balance of $26,000 and an even lower interest LOC (4.25%) with a balance of $25,000. He also has an RRSP loan of about $17,000 (3.25%).
We barely break even each month paying the min pymts on these as we are single income (his) and I`m at home with the kids (under 5) with no income.
We are considering a consumer proposal but are holding back because we are worried about destroying our credit rating – someday we would like to buy a home of our own – by the way we have no assets other than about $84,000 in rrsp`s and a $2000 vehicle.
We cannot get ahead with the pymts so high although we have low interest (for now) debt.
Would it be wise to do a CP, pay it off early and save our extra money instead of taking the next 20 yrs to pay this off? We are in our early 40`s and are worried about retirement and our kids education…..time is ticking away.
Posted from: British Columbia
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November 05, 2010 at 10:07 am, Barton Goth - Goth & Company Inc. -Trustee in Bankruptcy said:
You may find that there is very little difference between where you are currently and if you filed a consumer proposal. The thing many people forget to consider is that the lending decision for a mortgage or any other financial contract is based on many factors, three of which are credit rating, current level of indebtedness and cash flow.
So if you compare right now – high debt, low cash flow, good credit rating with after a proposal – no debt, better cash flow, an R7 with the credit bureau. Then the big question becomes what is more appealing to the bank. I would argue better cash flow and no debt.