$33,000 debt, no assets

I owe a rounded total of $33,000 spread across three credit cards, a line of credit and one retail credit card. With my income and expenses I can only afford to make the minimum payments on all the debt. At this rate it is going to take decades to pay off the principal. I have cut all my expenses to the minimum possible and there is still nothing left over at the end of the month. Frequently I bounce between overdraft and zero balance in my bank account. I called my bank and asked for a consolidation loan and was offered a $12,000 loan at 14%. As this interest rate is higher than my LOC and one of my cards (I have a card at 0% until July at which point it will jump to 18% and I won’t be able to afford even the minimum payments anymore) it didn’t make sense to take it and I turned it down. I was told to not bother asking for another 8-10 months. What can I do to pay this off faster? Should I try a different bank for a loan?

Posted from: Alberta

One Response to “$33,000 debt, no assets”

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

At this point you could approach another bank, but I don’t think that would help. At this point any consolidation loan you look at will be at a higher rate than you are currently pay and realistically I don’t see the problem being the interest, it is the size of the debt. What I would recommend is you look into the filing of a consumer proposal. What this will allow you to do is to negotiate a settlement with your creditors to pay a portion of the debt over a 60 month term. There are a number of reasons that you could look at this proposal, but from what you have told me so far the biggest is that it not only freezes the interest, but it permits you to pay an amount that you can afford as opposed to the full balance of the debt.