April 11th, 2009 by Questions
I lost my job in January 2009. I have just enough money to make next month`s mortgage and car payment. I have $1000 is RRSPs, and that`s it.
I can not lose either. What can I do?
Posted from: Ontario
April 12, 2009 at 11:04 pm, Barton Goth - Goth & Company Inc. -Trustee in Bankruptcy said:
This is difficult to say with such limited information, but the options we usually review with people are as follows:
The options that we suggest people consider when they are experiencing financial difficulty include:
1) A Debt Consolidation Loan – you approach a bank or other lender and apply for a loan to repay all of your existing debts. This solution is the only one listed here that will not adversely affect your credit rating. The advantage of a consolidation loan is that the interest charged is generally significantly lower than credit card interest rates. If you apply for a consolidation loan at a bank and your application is turned down that means the lender thinks you have accumulated more debt than you can reasonably be expected to handle.
2) Credit Counseling – 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 the interest is fixed at 5%, and while you are required to repay 100% of what you owe, due to the reduced interest your monthly payment is much lower than all of your minimum payments would have been without the plan.
3) A Proposal to Creditors (also called a Consumer Proposal)- 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 of the debt that you owe. Proposals are an excellent alternative to bankruptcy, but they are not well known so if you would like to know more details about a proposal feel free to contact me directly.
4) 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 trustee in bankruptcy, like myself.
The best thing to do is contact a local trustee, and review the options above. Depending on the specifics of your situation many of these options may allow you to do exactly as like and have no impact on mortgage, car payments or RRSP’s.
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