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I owe about 25000 in credit cards. Also a line of creit of about 18000. I am making my monthly payments but the interest keeps on adding up. I am not sure that I would qualify for a loan as my credit is high even though I am making the payments. What would be my best couse of action.

Posted from: Ontario

One Response to “Debt”

Barton Goth – Goth & Company Inc. -Trustee in Bankruptcy said...

When you are trapped in a position where you are only making minimal payments on your accounts or slightly better I find you are best to look at two options. The first is a debt consolidation loan. This is the option that would work best if you are in a position to qualify and the associated payments wouldn’t be to significant. The problem is that many people can’t qualify because their debt service ration is to high, or if the can qualify the payments simply are to high. This is when I would recommend you look at a consumer proposal. This is a legislated mechanism that allows you to cut a deal with your creditors and typically pay a portion of the debt over time. There is a blemish on your credit but typically this is outweighed by the substantial reduction in payments and removal of any future interest charges.

In terms of where to start, go see a licensed trustee. They are the only people in Canada that are able to to administer a consumer proposal and they will provide you with a free consultation that will assess where you sit and give you a little more specific of a suggestion than is available through this forum.